Revenue and profit increased steadily, rare earth prices promoted catalytic performance increased the company's revenue in 2021 was 10.616 billion yuan, + 30.15% compared with the same period last year, and realized net profit belonging to the parent company of 1.076 billion yuan, + 232.82% compared with the same period last year. Net profit attributed to the parent company after deducting non-recurrent profits and losses was 1.022 billion yuan, + 1326.07% compared with the same period last year; and the net cash flow generated by operating activities was 964 million yuan, + 189.74% compared with the same period last year. 21Q4 achieved revenue of 2.825 billion yuan in a single quarter, + 7.07% year-on-year and-3.50% month-on-month; net profit attributed to the parent company was 245 million yuan, + 38.61% year-on-year and-15.23% month-on-month. After deducting non-recurring profits and losses, the net profit attributed to the parent company was 219 million yuan, which was + 843.25% compared with the same period last year and-19.69% compared with the previous year.
The price of rare earths rose and the catalytic performance rose. In the first quarter of 2022, the results announced that the net profit attributed to the parent company was 7.00-750 million yuan, an increase of 125.31% 141.41% over the same period last year, and the net profit after deducting non-recurring profits and losses was 6.95-745 million yuan, an increase of 126.28% 142.56% over the same period last year. The main reason for the sharp increase in the company's profits is that, affected by factors such as market supply and demand, the prices of major rare earth products have risen year-on-year, and the company's production and sales have increased compared with the same period last year. The cycle of rising rare earth prices has been going on for nearly two years. Affected by the interview of the Ministry of Industry and Information Technology, rare earth prices showed a certain correction, which ushered in a strong rebound in May. On the supply side, imports of mines such as Myanmar are at a low level under the influence of the epidemic and war; in terms of the domestic pattern, due to the limitations of environmental protection and other problems, the production of medium and heavy rare earths is reduced and stopped seriously. The restrictions on light rare earth ores in the north are relatively small, while in the south, when the mining index is limited, the smelting separation of waste can not be produced normally due to the supply of raw materials, and the rare earth price is more supportive at the cost end. On the demand side, under the rhythm of resuming work and production, the production schedule of new energy vehicles increases, which provides strong support for the demand for rare earth magnets upstream. With the improvement of wind power data, the medium-term demand data will promote the price of rare earths.
With the continuous improvement of smelting technology and the deepening of the layout of the whole industry chain, Moat Company is the only listed company of rare earths in China with strategic layout at home and abroad. there is a relatively perfect system industrial chain that covers several major links, such as mining, metal smelting, separation and processing, rare earth waste recovery and so on.
Rare earth smelting separation has always been the main business of Shenghe Resources. Through mergers and acquisitions, the company currently owns two rare earth smelting separation bases in Sichuan and Jiangxi, and the company currently has a rare earth smelting separation capacity of about 15000 tons. Among them, Sichuan base Leshan Sheng and about 8000 tons, with light rare earth ore as the main raw material; Jiangxi base Chenguang rare earth about 7000 tons, with southern ionic rare earth ore, monazite chloride tablets, NdFeB and phosphor waste as the main raw materials. In addition, the company is currently promoting the construction of a new rare earth smelting separation production base in Lianyungang City, Jiangsu Province, and the Lianyungang rare earth separation project will increase the production capacity by at least 5000 tons. In addition to the smelting separation project under its own control, the company participated in two companies in the first half of 2021: 1) Guangxi Yuxiao Xijun, with a rare earth smelting separation capacity of 5000 tons / year 2) Hengyang Valley Road new materials, 5000 tons of rare earth chloride project has been completed, which will constitute an important supplement to the company's industrial chain.
Quota indicators are flexible, zirconium and titanium business helps enterprises to multi-point flowering quota, the company accounts for the largest proportion of rare earth quotas in the member units of Chinalco, one of the six major rare earth enterprise groups.
While overseas mine resources are not affected by domestic mining quotas, diversified rare earth concentrate supply channels at home and abroad have increased the supply elasticity of downstream business and rare earth production, and jointly increased the competitiveness of Shenghe resources in the industry.
Zirconium-titanium separation business is a major business of the company. At present, the output of domestic zirconium resources is low, and the global zirconium resources are mainly concentrated in countries such as Australia and South Africa. In recent years, with the increasing demand for zirconium, China has been the largest import of zirconium in the world. In terms of zirconium and titanium separation, the company currently has a processing capacity of 500,000 tons of seashore placer per year, of which this capacity can produce about 10,000 tons of monazite per year, and the rare earth content in monazite is about 55%. Can be used for the company's rare earth smelting separation capacity for production. In addition, the company is currently promoting the construction of a new mineral processing base in Lianyungang City, Jiangsu Province, with an additional annual processing of 1.5 million tons of zirconium and titanium beneficiation project. it is currently carrying out equipment installation and plans to put into trial operation in the second half of 2022. At that time, the processing capacity of zirconium-titanium ore will be increased to 2 million tons / year, and the output of monazite is expected to reach more than 30,000 tons. Zirconium-titanium separation business plays a positive role in raising the average valuation of rare earth plate, and multi-channel product supply capacity also has a core competitive advantage under the background of strict rare earth quota.
Give a rating of "increasing holdings"
We estimate that the company's revenue in 2022-2024 will be 211.6 million yuan, an increase of 97.9%, 17.8%, 17.2%, and a year-on-year growth rate of 99.6%, 14.9% and 14.7%, respectively.
The main points of valuation are as follows: on May 20, 2022, the share price is 17.97 yuan, with a total share capital of 1.753 billion shares, corresponding to a market capitalization of 31.5 billion yuan, and the PE in 2022-2024 is about 12, 10 and 9 times. The company issued the 2021-2022 Business Development Plan at the beginning of 2021, and will adhere to the goals set in the plan for production in 2022. Combined with the current prices of major rare earth products and the planned production schedule, as well as the revenue of various products in 2021, the company's future performance is more certain.
Risk hints: the price of rare earths has been lowered, the progress of overseas mineral mining is lower than expected, and the epidemic affects the operating rate.