\u3000\u3000 Chengxin Lithium Group Co.Ltd(002240) (002240)
Event overview: the company disclosed the performance forecast for 2021. In 2021, the net profit attributable to the parent company reached 830-920 million yuan, with a year-on-year increase of 2954.31% - 3285.50%, and the net profit deducted from non net profit was 848-938 million yuan, with a year-on-year increase of 472.96% - 512.55%. Among them, the net profit attributable to the parent company in Q4 in 2021 reached 292-382 million yuan, turning losses into profits year-on-year, with a month-on-month increase of 18.2% - 54.7%, and the net profit deducted was 310-400 million yuan, turning losses into profits year-on-year, with a month-on-month increase of 25.5% - 61.9%.
Analysis and judgment:
The upward price of lithium boosted the performance growth of 2021q4. 1) Price side: the prices of lithium carbonate, lithium hydroxide and metal lithium, the main products of 2021q4 company, have increased significantly month on month. According to the Asian metal network, the average prices of battery grade lithium carbonate, battery grade lithium hydroxide and metal lithium 21q4 are 208000 yuan / ton, 186000 yuan / ton and 1066000 yuan / ton respectively, with month on month increases of + 86.2%, + 59.6% and + 59.7% respectively. 2) Production and marketing side: thanks to the completion of 40000 tons of lithium salt production capacity by the end of 2020 and the continued prosperity of lithium downstream, the company's production and marketing are booming.
The global layout of smelting end has been opened, and the long-term capacity may reach 130000 tons. 1) The existing production capacity of the company is 15000 tons of battery grade lithium hydroxide and 25000 tons of battery grade lithium carbonate under the subsidiary Zhiyuan lithium industry. The first group of 150 tons of production capacity has been built for the first 600 tons of metal lithium project of Shengwei lithium industry, and the remaining production capacity is also under active construction. 2) The lithium salt production capacity under construction in China includes 20000 tons of lithium hydroxide production capacity in the first phase and 10000 tons of lithium hydroxide production capacity in the second phase of Suining Shengxin; 3) In terms of overseas layout, the subsidiary Shengxin international plans to invest and establish a joint venture with stellar in Indonesia (the equity ratio is 65% and 35% respectively). It is expected to invest 350 million yuan to build a project with an annual output of 50000 tons of lithium hydroxide and 10000 tons of lithium carbonate. The company has formed a global capacity layout.
Diversified resource guarantee is in progress to ensure the release of smelting capacity in the future. The company has launched a multi-source lithium resource guarantee layout: 1) the underwriting of lithium resources includes signing a 60000 T / a lithium concentrate underwriting agreement with Galaxy resources (the term is 2021-2023), and signing a 160000 T / a (+ / - 12.5%) lithium concentrate underwriting agreement with avz (the term is 3 years from production, which can be extended). 2) Its own lithium mineral resources include yelonggou lithium mine (the annual production scale of raw ore is 405000 tons, which is converted into about 75000 tons of lithium concentrate) and 10.2% equity of Huirong mining (it has the exploration right of Murong lithium mine, and the resource volume is converted into 1.5896 million tons of LCE). 3) It is proposed to acquire 50% equity of UT consortium, so as to indirectly obtain the operation right of sdla project in Argentina. The existing capacity of sdla project is 25000 tons of LCE; Acquire 51% equity of Max mind and obtain mining warrants for 40 ore blocks of sabixing Lithium Tantalum mine project in Zimbabwe, including 88000 tons of Li2O resources.
Excellent product quality has been recognized by downstream customers and is optimistic about future growth. At present, the company has signed long-term supply agreements with Contemporary Amperex Technology Co.Limited(300750) , AVIC lithium battery, Xiamen Tungsten Co.Ltd(600549) , Shanshan energy, LGI, beiteri, Shenzhen Dynanonic Co.Ltd(300769) , Beijing Easpring Material Technology Co.Ltd(300073) , Ningbo Ronbay New Energy Technology Co.Ltd(688005) and other industry-leading enterprises. In the future, the company may enjoy the growth dividend of the new energy industry.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2021 to 2023 will be RMB 885 million, RMB 1711 million and RMB 2144 million. Based on the closing price on January 25, 2022, the corresponding PE will be 46x, 24x and 19x respectively. It will be covered for the first time, and the company will be rated as "prudent recommendation".
Risk tip: the demand is less than expected, the lithium price has fallen sharply and its own projects are less than expected
