Recently, a number of listed companies issued performance forecasts, which greatly improved the performance of relevant enterprises in 2021 due to the continuous rise of lithium battery sector in 2021. Lithium industry leader Ganfeng Lithium Co.Ltd(002460) (002460, hereinafter referred to as Ganfeng Lithium Co.Ltd(002460) ) recently released the annual performance forecast for 2021. The good news that the net profit is expected to increase by more than four times has once raised its market value back to 200 billion.
According to the performance forecast, the net profit attributable to the shareholders of the listed company is expected to be 4.8 billion yuan to 5.5 billion yuan in 2021, with a year-on-year increase of 368.45% – 436.76%; It is estimated that the annual net profit attributable to the parent company after deducting non-profit is 2.9 billion yuan to 3.6 billion yuan, with a year-on-year increase of 621.00% – 795.04%. The 2021 annual report is expected to be officially released on March 31, 2022.
According to the previous financial report data, Ganfeng Lithium Co.Ltd(002460) made a profit of about 470 million yuan, 940 million yuan and 1.05 billion yuan respectively in the first three quarters of 2021. Based on this calculation, the net profit of the company in the fourth quarter of 2021 is as high as 2.32 billion yuan to 3.02 billion yuan, which is about 50% of the net profit of 2021.
In only one year, Ganfeng Lithium Co.Ltd(002460) achieved a net profit growth of more than 400%. According to the financial report of 2020, the company realized an operating revenue of 5.524 billion yuan, a net profit attributable to the parent of 1.025 billion yuan, and a net profit attributable to the parent of 441 million yuan after deducting non profits.
For such amazing performance growth, Ganfeng Lithium Co.Ltd(002460) said in the report that with the rapid development of new energy vehicles and energy storage industry, the demand for lithium salt from downstream customers increased strongly, the production and sales volume of lithium salt products of the company increased, and the product price continued to rise. New projects in the lithium battery sector of the company were put into operation and the production capacity was gradually released, so the operating net profit of the company increased year-on-year.
Ganfeng Lithium Co.Ltd(002460) founded in March 2000, it is a lithium metal manufacturer with the most complete lithium products, the highest product level and the longest processing chain in China. The business runs through the whole industrial chain of resource mining, refining and processing, battery manufacturing and recycling. It has laid out five sub markets, including consumer batteries, small polymer cells, solid-state lithium batteries, lithium power batteries and energy storage batteries, and provided more than 40 kinds of lithium compounds and metal lithium products, which are widely used in the fields of electric vehicles, energy storage, 3C products, chemicals and pharmaceuticals Batrui, Jingke energy and other companies have reached a strategic cooperation intention.
In 2010, Ganfeng Lithium Co.Ltd(002460) was listed on the Shenzhen Stock Exchange, becoming the first listed company in China’s lithium industry. In 2018, Ganfeng Lithium Co.Ltd(002460) landed on the Hong Kong stock exchange again, becoming the first lithium company to be listed on both A-Shares and H shares.
As the only enterprise in the world with three industrialization technologies of “extracting lithium from brine”, “extracting lithium from ore” and “recovering lithium”, the capacity of lithium compound and metal lithium of Ganfeng Lithium Co.Ltd(002460) is sufficient. It holds many high-quality ore sources in Australia, Argentina, Mexico, Ireland, Qinghai, Jiangxi and other places in China. As of the first half of last year, the company’s equity lithium resources were 26.11 million tons of lithium carbonate equivalent, ranking first in the world.
At present, Ganfeng Lithium Co.Ltd(002460) has an annual production capacity of 43000 tons of battery grade lithium carbonate, 81000 tons of battery grade lithium hydroxide and 2000 tons of metal lithium. In 2022, the annual production capacity of 40000 tons of battery grade lithium carbonate of cauchari olaroz lithium salt lake project in Argentina will be added.
With the rapid growth of new energy vehicle industry, the price of lithium carbonate, the core raw material of power battery, remains high. The price of lithium carbonate will increase by more than 400% annually in 2021. According to the latest data of Shanghai Nonferrous Metals network on January 26, the average price of industrial grade lithium carbonate is 348000 yuan / ton, and the average price of battery grade lithium carbonate is 364000 yuan / ton.
According to the research report released in January, the tight supply and demand of the industry will be difficult to ease in the next 2-3 years, and the average price of lithium carbonate is expected to remain at 300000 / ton this year and next. Kaiyuan securities predicts that the global lithium supply will reach 427000, 531000, 683000 and 968000 tons of lithium carbonate equivalent (LCE) respectively from 2020 to 2023, with a compound annual growth rate of 31.4%; The demand will reach 362000, 504000, 684000 and 889000 tons of LCE respectively from 2020 to 2023, with a compound annual growth rate of 34.9%.
In addition to the sharp rise in lithium prices, Ganfeng Lithium Co.Ltd(002460) ‘s performance has also been affected by the rise in the share prices of listed companies. According to statistics, Ganfeng Lithium Co.Ltd(002460) has more than 40 equity holding subsidiaries, covering upstream lithium extraction, midstream lithium compound and metal lithium processing, downstream lithium battery production and battery recycling.
According to the 2021 semi annual report, Ganfeng Lithium Co.Ltd(002460) holds shares of Mayinglong Pharmaceutical Group Co.Ltd(600993) , San’an light, Galan lithium (ASX: Gln) and other domestic and foreign companies. Among them, garland lithium is a listed company on the Australian Stock Exchange (ASX), and its share price rose nearly fourfold during 2021. In the first half of 2021 alone, Galan lithium brought more than 40 million yuan to Ganfeng Lithium Co.Ltd(002460) .
It is worth noting that there is a difference of 1.9 billion yuan between Ganfeng Lithium Co.Ltd(002460) annual net profit attributable to the parent and net profit deducted from non attributable to the parent. According to the staff of Ganfeng Lithium Co.Ltd(002460) securities department, the non recurring profit and loss of 1.9 billion yuan in the performance forecast in 2021 mainly comes from the income from holding the equity of lithium mining enterprise Pilbara (ASX: PLS). The company is also listed on the Australian Stock Exchange (ASX). Pilbara’s share price nearly tripled in 2021 and its current market value is as high as a $10.32 billion.
In March 2019, Ganfeng Lithium Co.Ltd(002460) acquired 8.37% equity of Pilbara for a $50 million (about 226 million yuan). After several rounds of financing, Ganfeng Lithium Co.Ltd(002460) has reduced its equity share to 5.80%, and its current market value is 599 million Australian dollars (about 2.715 billion yuan). In other words, in less than three years, the floating profit of investing in Pilbara project alone reached a $549 million (about RMB 2.489 billion).
In addition, Ganfeng Lithium Co.Ltd(002460) signed the product supply contract with Tesla in November 2021, 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. Ganfeng Lithium Co.Ltd(002460) pointed out that the contract will be performed and revenue will be recognized from 2022 to 2024, which will have a positive impact on the operating performance of these three years.
According to the latest data, on January 26, Ganfeng Lithium Co.Ltd(002460) appeared in the top ten active stocks of Shenzhen Stock connect, ranking fifth in the turnover of Hong Kong capital of Shenzhen Stock connect, with a total turnover of 985 million Hong Kong capital. Among them, 556 million were bought, 428 million were sold and 128 million were net bought, accounting for 3.03% of the total trading volume of the stock on that day.
In the past month, Ganfeng Lithium Co.Ltd(002460) rose by 5.35%, and was listed in Shenzhen Stock connect for 14 times, with a cumulative net purchase of 1.433 billion by foreign capital; In the past two months, it fell by 15.57%, and was listed in Shenzhen Stock connect for 22 times, with a cumulative net purchase of 766 million by foreign capital; Since this year, it has fallen by 2.86%, and has been listed in Shenzhen Stock connect for 10 times, with a cumulative net purchase of 900 million yuan by domestic and foreign investors.
In 2021, Ganfeng Lithium Co.Ltd(002460) had a maximum market value of 316.1 billion yuan, which has shrunk by nearly 40%. On January 25, after the disclosure of the performance forecast, when the overall A-share market fell, Ganfeng Lithium Co.Ltd(002460) share price rose by 2.33%, and the market value once returned to 200 billion yuan. As of the closing on January 26, Ganfeng Lithium Co.Ltd(002460) reported 138.76 yuan, an increase of 0.54%, with a total market value of 19.5 billion.
