Event description
In 2021, the company realized operating income of 4.35 billion yuan, year-on-year + 93.00%; net profit of 663 million yuan, + 98.25%; and non-return net profit of 694 million yuan, + 268.94% of the same period last year. The company's 2021Q4 realized operating income of 1.146 billion yuan, year-on-year + 90.57%, month-on-month + 1.95%; realized return-to-mother net profit of 177 million yuan, year-on-year + 2.63%, month-on-month + 35.57%; realized deduction of non-return net profit of 151 million yuan, year-on-year + 256.45%, month-on-month-0.46%.
Event comment
With the increase in volume and price, the company's revenue increased significantly in 2021. Cobalt and copper prices rose sharply in 2021 against the backdrop of continued global liquidity easing, economic recovery and continued mismatch between supply and demand of metals. In 2021, the average prices of cobalt, cobalt powder and SHFE copper were + 38%, + 51% and + 40% respectively compared with the same period last year. With the annual production of 20, 000 tons of copper in the cold sharp metal project and the climbing capacity of the Congo Maite copper electrolysis technical renovation project, the capacity utilization rate of the Anhui Hanrui 3000 ton cobalt powder project and the Congo Matt cobalt hydroxide project increased, and the company's production and sales of cobalt and copper increased significantly in 2021, of which the sales volume of cobalt and copper products were 8242.65 tons and 34599.22 tons respectively, which were + 38% and + 27% respectively compared with the same period last year. Copper production for the whole year was 39896.78 tons, and copper stocks were 5390.81 tons by the end of 2021, an increase of 5298 tons over the end of 2020. In the fourth quarter alone, the company's revenue was basically flat. The price of copper is basically unchanged from the previous month, the price of cobalt has increased significantly from the previous month, and the average price of the metal cobalt Q4 has increased by 20% from the previous month. The flat revenue in the fourth quarter may be due to the company's periodic adjustment of sales rhythm according to market demand.
Price upward, reduce cost and increase efficiency, the company's profitability increased significantly in 2021. In 2021, the company achieved a gross profit of 1.337 billion yuan, of which cobalt and copper accounted for 66% and 34% respectively, and the proportion of cobalt products increased significantly. For the whole year, the company achieved a gross profit margin of 30.7%, year-on-year + 6.9pct, of which cobalt and copper realized gross profit margins of 34.4%, 25.5%, + 19.1pct and-7.1pct, respectively. Among them, the gross profit per ton of copper products remained basically stable, and the rise in copper prices led to a decline in gross profit margin. At the same time, the company reduces costs and increases efficiency, and the four major expenditure rates in 2021 are 6.2%, compared with the same period last year-3.4pct. At the same time, the company's strategic participation in Funeng Technology will produce a fair value change profit and loss of-92.8 million yuan in 2021. In the fourth quarter alone, the company's net profit deducted from non-return is basically flat. On the one hand, 2021Q4 achieved a gross profit of 363 million yuan, a month-on-month ratio of + 66 million yuan, a gross profit margin of 31.7%, and a month-on-month ratio of + 5.2pct. On the other hand, expenses increased in the fourth quarter, with the four major expenses totaling + 39 million yuan, of which management expenses increased by nearly 20 million yuan.
The project under construction is smooth, and the production capacity of 2022 copper and cobalt has been further increased. The company rebuilt the "5000 tons of electrodeposited cobalt" in the fund-raising project into a "6000 tons of electrodeposited copper" production line, which was put into production at the end of 2021; on the basis of the original production line, the company added cobalt precipitation, pressure filtration, flash and other processes into a "5000 tons of cobalt hydroxide" production line, which is expected to be put into production in the second quarter of 2022. Anhui Hanrui annual output of 5000 tons of metal cobalt powder production line technical transformation and expansion project, has been officially put into production in January 2022. The first phase of the infrastructure project of Hanrui in Ganzhou has been basically completed and the equipment installation is currently under way and is expected to be put into production by the end of June 2022.
Capacity expansion gradually hit the ground, optimistic about the company's performance elasticity under the high shock of metal prices. Cobalt will continue to be tight in supply and demand in 2022, while outbreaks in Africa and extreme weather will continue to disturb inland and maritime logistics; against the backdrop of low inventories, cobalt prices are expected to fluctuate at high levels, and the annual average cobalt price is expected to reach more than 400000 / ton, up from the same period last year. At the same time, against the background of rising global energy prices and continuous supply-side disturbances, the hidden cost of copper has risen, and copper prices remain optimistic throughout the year. With the company's construction projects in production climbing, in the context of the overall high metal prices, the company's performance flexibility is strong. In the future, the company will also increase the layout of new energy resources, with the help of Hong Kong stock IPO, the company's new energy strategy is also worth looking forward to. It is estimated that from 2022 to 2024, the company's return net profit will be 11.97,12.66 and 1.346 billion yuan respectively, corresponding to PE15.4X, 14.6x and 13.7x.
Risk hint
1. The release of supply is higher than expected and prices fall.
2. The downstream demand is lower than expected, and the sales volume of the company's products is not as expected.
