Summary of the report:
The layout of the company's lithium industry chain is complete, and its development has entered a new stage. The company has gradually moved from asphalt manufacturing to lithium industry, and now it has set foot in three major fields, such as lithium mining and separation, lithium salt smelting, lithium power equipment and so on. The industrial chain layout is complete, and it relies on the downstream lithium giant BYD. From 2014 to 2019, the company's mines stopped production for some reason, which dragged down the performance and led to the ST of the company. However, with the resumption of mine production and the improvement of the prosperity of the lithium industry after 2019, the company's profits became positive and capped in 2020, and achieved a high performance increase in 2021-2022Q1.
Sitting on the world-class resource methyl card 134 pulse, the acquisition cost advantage is significant. Methyl card vein 134 is endowed with excellent resources, with lithium reserves of about 1.02 million tons of LCE, which is relatively sufficient, and the grade is more than 1.42%. It is the top level of lithium ore in China, which is also higher than most Australian mines. At the same time, the veins are concentrated, suitable for opencast mining, and the mining difficulty is low. In terms of the actual mining cost, the annual production cost of lithium concentrate in 2020 is about 1428 yuan / ton, which is almost the same as the cost of Terlison, the world's highest quality lithium mine.
Mining and metallurgical capacity expansion and orderly progress, the company's strong growth road is divided into three steps: 1) Step 1: Yuanyangba 2.5 million tons concentrator is expected to put into production before 2023Q2, the company's mining capacity increased to 1.05 million tons (mining end can not match with mineral processing, only 1.05 million tons), lithium concentrate can rise from the existing 70,000-80,000 tons to 190000 tons, reduced to 25000 tons LCE, and Chengdu Rongjie existing phase 20, 000 tons of lithium salt capacity basically matched. 2) Step 2: in the medium term, the company's mining capacity may be expanded from 1.05 million tons to 2.5 million tons, matching with mineral processing, lithium refined minerals can rise to 470000 tons, reduced to 60,000 tons LCE;. At the same time, Chengdu Rongjie Lithium Industry Phase II landed, and lithium salt production capacity expanded to 40,000 tons (or more). 3) Step 3:
Methyl card mining area is rich in lithium resources and has a large number of potential ore veins. As an enterprise with the most abundant mining experience in Sichuan, the company has a prominent competitive advantage and may further increase its reserves in the long term.
Tight supply and demand support high lithium prices, and the development of local resources, represented by Sichuan lithium mines, is accelerating.
1) the supply and demand pattern of the lithium industry is better this time. The new energy vehicle + energy storage field provides the main demand increment, while the mainstream lithium supply increment is limited. It is expected that the industry will continue to maintain a tight balance from 2022 to 2023, but if the demand amplification effect within the industrial chain is taken into account, the actual contradiction between supply and demand is more prominent, which determines that the lithium price will remain strong. 2) Lithium resources have become the bottleneck of the development of domestic lithium power industry, and the current policy is accelerating the development of local resources such as lithium mines in Sichuan, and enterprises with high-quality mines are expected to fully benefit.
Profit forecast and investment suggestions: the net profit from 2022 to 2024 is expected to be 20.1,33.1 and 4.99 billion yuan, taking into account the high prosperity of the lithium industry and the company's mining and metallurgical capacity expansion, giving the company a "holding" rating.
Risk hints: demand is lower than expected, supply is higher than expected, and production capacity is not as expected.