\u3000\u3000 Ganfeng Lithium Co.Ltd(002460) (002460)
Event: the company released the performance forecast for 2021 on the evening of January 24. In 2021, the net profit attributable to shareholders of listed companies was 4.8-5.5 billion yuan, a year-on-year increase of 368.45% – 436.76%; The net profit after deducting non recurring profits and losses was 2.9-3.6 billion yuan, a year-on-year increase of 621% – 795.04%.
Comments: if calculated according to the median value, the net profit attributable to the parent company in Q4 of 2021 was 2.68 billion yuan, an increase of 153.5% month on month, another record high in the company’s single quarter performance, mainly due to (1) the rising price of lithium salt products. As of December 31, 2021, the prices of battery grade lithium carbonate and lithium hydroxide reached 270000 yuan / ton and 216000 yuan / ton respectively, an increase of 65% and 42% compared with the end of the third quarter. 2) The financial assets held by the company generated gains from changes in fair value, and the share price Q4 of Pilbara company held by the company increased from a $1.94 to a $3.2.
Lithium salt production capacity continues to expand, and the guideline of 200000 t / a LCE production capacity in 2025 is clear. As of December 2021, the company’s capacity of battery grade lithium carbonate is 43000 T / A and that of battery grade lithium hydroxide is 81000 T / A. The future capacity planning includes: 1) the new energy material project of lithium battery with an annual output of 50000 tons in Fengcheng City, Jiangxi Province. The project is constructed in two phases, and the first phase is the lithium hydroxide project with an annual output of 25000 tons; 2) Cauchari olaroz lithium salt lake project is constructed in two phases. The capacity of phase I is 40000 tons of lithium carbonate, and the capacity of phase II expansion is not less than 20000 tons of lithium carbonate equivalent; 3) Mariana lithium salt lake project, with a phase I capacity of 20000 tons of lithium chloride; 4) Sonora lithium clay project has a capacity of 20000 tons of lithium hydroxide in phase I.
Downstream actively layout the battery field, highlighting the advantages of leading integration. On January 22, 2022, Jiangxi Ganfeng lithium battery phase II project with an annual output of 10gwh new lithium battery was put into operation, which includes lithium iron phosphate square hard shell cell, soft pack cell, solid-state battery and other production lines. At the same time, the first batch of 50 Dongfeng E70 electric vehicles equipped with Ganfeng solid-state batteries have also been officially delivered, taking the lead in the commercialization process of solid-state batteries.
Tesla renewed the order with Ganfeng Lithium Co.Ltd(002460) for three years, and high-quality customers guaranteed the order. The company signed a product supply contract with Tesla, which agreed that the company and Ganfeng international would supply battery grade lithium hydroxide products to Tesla from January 1, 2022 to December 31, 2024. The actual purchase quantity and sales amount shall be subject to the purchase order issued by Tesla. The renewal further consolidated the long-term cooperative relationship between the company and Tesla.
Profit forecast and rating: according to our annual strategy report, the global lithium carbonate will still be in short supply in 2022 and 2023. As of January 24, 2022, the market price of lithium carbonate has reached 357000 yuan / ton. Assuming that the market lithium price center in 2022 and 2023 is 250000 yuan / ton and 220000 yuan / ton, which are 113% and 87% higher than the average market price of 117000 yuan / ton in 2021, respectively. Taking into account the substantial increase in prices and the guarantee of high-quality customer orders, we raised our profit forecast. It is estimated that the EPS from 2021 to 2023 will be 3.45 yuan, 6.36 yuan and 8.51 yuan respectively, up 38% / 100.6% / 112.2% respectively, corresponding to 39 times, 21 times and 16 times of 2021-2023pe. In view of the advantages of the company’s integrated layout, we maintain the “overweight” rating.
Risk warning: the output of downstream electric vehicles is lower than expected; Price fluctuation risk of raw materials; Market competition intensifies risks; The supply side capacity of the industry is released too quickly; The project construction of the company is less than expected; Safety and environmental protection risks, etc.
