The development strategy is clear: the company enjoys the technological advantages of R & D in the middle reaches, and extends to the upstream resources and downstream at the same time to achieve vertical integration. Shangtuo Resources can iron plain material cost fluctuations to ensure profit space; the extension of the industrial chain, the layout of lithium new materials field, can enjoy the high valuation of new energy track.
Future growth is guaranteed: the company's current fund-raising project is progressing smoothly. The domestic factory expects Q3 to achieve the second phase expansion target of 13500 metal tons of cobalt salt in 2022, and the cobalt salt production capacity will reach 20, 000 metal tons. follow-up capacity planning: 10000 tons of nickel products, 40000 tons of ternary precursors, 320000 tons of 98% sulfuric acid, 6600 tons of liquid sulfur dioxide; Congo Tengyuan expects to increase the annual production capacity of copper to 40000 tons and cobalt to 10000 tons by the end of 2022. Follow-up planning: 40000 tons of concentrated sulfuric acid, 1500 tons of liquid sulfur dioxide and 15000 tons of alkali sulfide.
The company has obvious advantages in smelting process: the company attaches great importance to technology research and development, and relies on independent research and development of diversified cobalt resource recovery technology to improve metal recovery and reduce production costs. the gross profit margin of the company's products is obviously better than that of comparable companies in the industry.
The company's PE is significantly lower than the industry average: in 2022, the company's PE multiple is only 10 times, significantly lower than the industry average of 16 times; 2023 company PE multiple is only 7.5times, significantly lower than the average of 12.5times.
Risk hint
The company's performance is mainly affected by three dimensions: 1) the current expansion of 20,000 tons of cobalt salt and the DRC electrowinning copper project will directly affect the rhythm of the company's production and marketing; 2) the product price cycle will directly affect the company's revenue and gross profit; 3) at present, the company's production of raw materials is still dominated by procurement, and the increase in acquisition costs will directly affect the cost of product production and erode the company's gross profit and net profit space.
The progress of the project is not as expected: if the production of 20, 000 tons of cobalt salt is not as expected, affecting 10% of the output of cobalt salt, the company's net profit will face a loss of about 160 million.
Prices of major products decline: if the prices of cobalt salts and copper electrowinning fall by 5%, the company's net profit will face a loss of about 100 million.
Increase in the cost of raw materials / accessories: if the cost of purchasing raw materials and accessories increases by 5%, the company's net profit will face a loss of 120 million.