Event: on September 23, the company announced that it plans to invest in a new energy material project with an annual production capacity of 300000 tons of battery-grade nickel sulfate, 300000 tons of battery-grade iron phosphate and 10,000 tons of metal-grade cobalt products in Fuquan City, Qiannan Prefecture, Guizhou Province.
The total investment of the project is 6.19 billion yuan and the total construction period is three years. As of 2021H1, the company has a monetary fund balance of 1.5 billion yuan. In the future, the company may raise project investment funds through its own funds, bank or financial institution debt financing, equity financing and so on. The project is planned to be built in two phases in three years, with Shengtun new materials, a wholly owned subsidiary of the company, as the main body of construction. at present, it is still in the process of completing the examination and approval procedures of government agencies.
The company's nickel-cobalt industry chain further extends to downstream battery materials. 1) the current nickel and cobalt production capacity of the company is mainly nickel-cobalt intermediates such as ferronickel and cobalt hydroxide. as of 2021H1, the company has a total production capacity of 40,000 tons of nickel materials and 8000 tons of cobalt materials, of which the nickel production capacity is dominated by the high nickel matte project with an annual production capacity of 34000 tons of nickel in Weidabe, Indonesia (currently producing nickel and iron). 2) at present, cobalt intermediate products are also the main products in investment or under construction. The CCM copper and cobalt project in the Democratic Republic of the Congo and the Cronway project in the Democratic Republic of the Congo both have crude cobalt hydroxide production capacity of 5800 metal tons and 3600 metal tons respectively. In the next three years, the company is expected to form an annual production capacity of 45000 tons of nickel and 16000 tons of cobalt, of which about 34000 tons of nickel metal and 13000 tons of cobalt metal intermediate products. 3) the new energy materials project uses nickel iron, high nickel matte, nickel concentrate and crude cobalt hydroxide as raw materials to produce battery-grade nickel sulfate, cobalt sulfate, cobalt tetroxide and other products. The annual metal handling capacity of the project is 68000 tons of metal nickel and 10,000 tons of metal cobalt, which can basically digest the company's own intermediate production capacity.
Embrace the lithium iron phosphate track. In addition to nickel and cobalt materials, the project also involves 300000 tons of battery-grade iron phosphate.
In the past two years, due to cost and safety advantages, lithium iron phosphate has been favored by downstream battery factories again, and its market share has gradually increased. At present, both lithium iron phosphate and ternary have their own use scenarios. Lithium iron phosphate is more suitable for energy storage, commercial vehicles and medium-and low-end models, while ternary is more suitable for high-end passenger cars. The company's layout of iron phosphate production capacity can significantly enhance the company's anti-risk ability while enjoying the dividend of dual-track development.
The company's profitability will be significantly enhanced. Based on the price of 130,000 yuan / ton nickel and 300000 / ton cobalt, the annual operating income of the project is expected to be 15.341 billion yuan, and the annual net profit is 1.321 billion yuan, which is 39% and 2239% of the 2020 operating income and return net profit respectively.
Maintain the "highly recommended-A" investment rating. The company is expected to achieve net profit of 14.13,19.17 and 2.513 billion yuan from 2021 to 2023, with a corresponding price-to-earnings ratio of 24.3,17.9 and 13.7 times respectively.
Risk tips: project approval progress is not as expected, fund-raising progress or scale is not as expected, metal prices fluctuate sharply, exchange risk, safety and environmental protection risk, etc.
