Core logic:
The integrated layout of the industrial chain has outstanding synergy advantages.
Rongjie shares rely on Methyl Card No. 134 as the resource, and the chief controller, Hua Li, and Chengdu Rongjie take a stake in Chengdu Rongjie to expand the layout of lithium salt business plate, while cooperating with BYD to develop downstream lithium battery equipment, forming an integrated layout of resource development-smelting processing-equipment manufacturing industry chain, giving full play to the advantages of the industrial chain, and achieving significant synergy. Benefiting from the uptrend of the business cycle of the lithium industry, the layout of the whole industrial chain of the company will fully enjoy the periodic dividend.
Sitting on the highest quality spodumene mine in China and expanding on the fast track company, the No. 134 methyl card vein mining right owned by the company is located in the largest methyl card ore field in China and the second in Asia, which is a rare high-quality lithium ore resource in China. The average Li2O1.42%, of raw ore is the highest among the known development / construction mines in China, with open-pit mining and convenient transportation, and production ranks on the left side of the global cost curve, which has a competitive advantage. At present, the mining scale of the mine is 105 million tons / year, the mineral processing scale is 450,000 tons / year, and the annual output of lithium concentrate is 70-80,000 tons. It is the largest spodumene mine in China at present. The company's 2.5 million tons / year lithium concentrate mineral processing project is under way, and construction is expected to start this year. After completion, it will have a mineral processing capacity of 470000 tons of lithium concentrate and will become the largest local producer of lithium concentrate in China.
The company will benefit from the rising volume and price of lithium mining business, which will lead to rapid growth in performance.
Matching resources and the right time for lithium salt production expansion
The company's chief controller and Huali have a lithium salt processing and purification capacity of 4800 tons / year, and the participating company Chengdu Rongjie Phase I lithium salt project has been put into production, of which battery-grade lithium carbonate production capacity is 12,000 tons / year, battery-grade lithium hydroxide capacity is 0.8000 tons / year, March production capacity has reached the designed production capacity, and it is expected to achieve a higher production target in 2022. Capacity release conforms to the lithium business cycle, bringing performance increment. At present, the raw materials for lithium salt production in Chengdu Rongjie are partly supplied by Methyl Card 134. after the 2.5 million ton concentrate dressing project is put into production, 20,000 tons of lithium salt raw materials in the first phase will be completely self-sufficient, making it one of the lithium salt enterprises with the highest raw material self-sufficiency rate in China.
Lithium electricity equipment relies on BYD to develop steadily
Dongguan Derui is the company's lithium power equipment production equipment business platform, the products tend to the latter part of the battery production process. Relying on the steady development of BYD blade battery strategy, the company has actively developed external customers and won market recognition, resulting in a substantial increase in orders in 2021 and a new production workshop of 8000 square meters to ensure the company's order conversion capacity. External business expansion has opened up room for continued business growth, and lithium equipment business is expected to move forward steadily.
Profit forecast: the company is expected to benefit from the expansion of scale and the business cycle of the industry. From 2022 to 2024, the company's operating income will reach 42.3 billion yuan, and its net profit will reach 2.72 billion yuan. The corresponding EPS will be 5.82 shock 10.46 yuan, and the corresponding share price PE will be 17.913.3 cusp 10.0. It will be covered for the first time and given a "buy" rating.
Risk hint: 2.5 million tons / year concentrate mineral processing project construction / production progress is not as expected, lithium price is lower than expected.