The company has obvious advantages in smelting process: the company's technology is based on original technology, self-research production line and self-made equipment to obtain excess profits in dealing with low-cost complex ores without the advantage of mine resources. the gross profit margin of the company's products is obviously better than that of the industry by 8-10 percentage points.

The future growth is guaranteed: the company's current fund-raising project is progressing smoothly, and the domestic factory expects Q3 to achieve the second phase expansion target of 13500 metal tons of cobalt salt in 2022, with a cobalt salt production capacity of 20, 000 metal tons, an increase of 200% over the same period last year. Follow-up capacity planning: 10000 tons of nickel products, 40000 tons of ternary precursors, 320000 tons of 98% sulfuric acid and 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. Cobalt intermediate production capacity increased by 54% year-on-year, electrodeposition copper production capacity increased by 43%. Follow-up planning: 40000 tons of concentrated sulfuric acid, 1500 tons of liquid sulfur dioxide and 15000 tons of alkali sulfide.

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.

The company's PE is significantly lower than the industry average: in 2022, the company's PE is only 11 times, significantly lower than the industry average of 15 times; 2023, the company PE is only 8 times, significantly lower than the average of 12 times.

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.