Hold 70% of the shares and expand another 40,000 tons of fire high matte project. On the evening of December 2, the company announced that Hongsheng International, a wholly owned subsidiary of the company, intends to set up a joint venture with Extension in Indonesia to set up Shengmai Nickel Co., Ltd., and to build a project with an annual production capacity of 40,000 tons of nickel in Innesia's Vedabe Industrial Park (IWIP). Hongsheng International and Extension own 70% and 30% respectively. The total investment in the construction of the project is 350 million US dollars. According to the proportion of shares held by the company, the company's overseas investment is 245 million US dollars, equivalent to 1.566 billion yuan. The construction period of the project is 18 months.
The total production capacity of the company's nickel resource planning has reached 74000 tons, and the Youshan high nickel project has been successfully operated and accumulated in mature operation. In August 2019, the company penetrated 35.75% of its shares and jointly built the first 34000-ton high nickel matte project with Huayou and Castle Peak, with a total investment of US $407 million, which was successfully put into production in September 2020. 1) the project is also located in IWIP Industrial Park, which can produce better collaborative management effect; 2) make full use of the existing experience in construction, production and operation to optimize the existing smelting process to ensure the smooth commissioning of the project; 3) after the project is put into production, the company's total nickel production capacity reaches 74000 tons, rights and interests 40200 tons, and the resource control and guarantee capacity is further enhanced. 4) the cost per ton of high matte is about US $10,000. under the assumption of US $16000 nickel price, the equity of 40200 tons is expected to contribute US $240 million, or about 1.58 billion yuan.
The nickel intermediate product project is planned and put into operation, and the company successfully grabs the first-mover advantage in the market. With the rapid growth of demand for nickel sulfate driven by new energy batteries, the smelting project of nickel laterite ore in Indonesia has become a must. In September 2020, the company's first 34000-ton fire project was successfully put into production, seizing the market first profit advantage; in May 2021, Ningbo Liqin's first wet MHP project was launched. From the perspective of future planning, the 60,000-ton Huayue Wet process Project has been successfully trial-produced recently; the Green Green Meibang Project is scheduled to be put into operation at the beginning of 2022; and the 45000-ton Huake High Ice Nickel Project is scheduled to be put into production in mid-2022. In addition, the Castle Peak 75000 ton nickel iron to high nickel matte project breaks down the barrier between nickel iron and nickel sulfate and increases the potential raw material source of nickel sulfate.
Focus on overseas high-quality lithium power resources, extend the integrated layout. The company focuses on nickel, cobalt, copper and zinc metal, actively develops high-quality energy metal resources at home and abroad, and appropriately extends to downstream lithium raw materials. At present, there has been a coordinated development of copper and cobalt business in the Democratic Republic of the Congo, nickel business in Indonesia and domestic metal smelting and processing business.
In the next three years, the company's performance may focus on the CCR&CCM copper and cobalt smelting project, the Kalonway copper and cobalt resources smelting integration project and the Indonesia Youshan and Shengmai high nickel matte project, and the new material business is beginning to take shape.
Investment suggestion: the company focuses on the upstream nickel, cobalt and copper resources of new energy, and extends down to the field of new energy processing. The integrated layout of new energy lithium materials is getting better and better, and the company's profitability is expected to continue to grow.
We estimate that the return net profit of the company from 2021 to 2023 is 15.94,20.14,2.349 billion yuan respectively, corresponding to PE 19.5,15.4,13.2 times, PB 2.6,2.2,1.9 times respectively, maintaining the "buy" rating.
Risk tips: nickel price fluctuation risk, joint venture project progress uncertainty risk.
