Abstract

Divest cement business and focus on expanding lithium resource business

In 2021, the demand of the building materials industry is saturated, the profitability is declining, and the net profit of the company during the reporting period decreased by 55.46% compared with the same period last year. Based on the decline of the prosperity of the real estate industry and considering the actual situation of the company, the company plans to strategically withdraw from the traditional building materials cement business. The company issued an announcement on January 26, 2022, planning to sell 100.00% of the shares of Qinghai Mutual Fund Yuan cement Co., Ltd. The company made its second public listing according to the listing scheme from June 12, 2022 to June 17, 2022, solicited an intended transferee, Zhejiang Huayue, and delisted and confirmed that the delisting transaction price was 1.7244 billion yuan. at the same time, the transferee undertakes 1.3420224 billion yuan, that is, after the completion of this equity transfer transaction, the actual transfer amount of the company is 3.0664224 billion yuan. After the completion of this transaction, the company will adjust the industrial structure and optimize the asset structure, and focus on the business development of lithium resources.

Buy Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxqiancuo salt lake

On November 9, 2021, the company announced that it would purchase 51.00% of the shares of Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxqiancuo salt lake with its own capital of 510 million yuan, formally laying out the lithium resources business According to the data disclosed by the company, LXXXVI Qiancuo Salt Lake is located in Geji County, BABA Prefecture, Tibet Autonomous region, China. The brine area of the salt lake is 152400 square kilometers. The validity period is from September 30, 2021 to April 2, 2029. Mining minerals: boron, lithium, potassium; mining scale: 200000 tons / year. Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxqiancuo salt lake boron-lithium potash ore reserves of 186000 tons of lithium (lithium), lithium (LiCl) average grade 2153.86mg/L. On June 6, 2022, the company announced that it intends to buy Liu Yan, Liutuo and Jiabu by issuing shares and paying cash to hold a 49% stake in Tibet BABA Liyuan Mining Development Co., Ltd. Geji County Lithium Industry Development Co., Ltd., a wholly-owned subsidiary of Liyuan Mining Co., Ltd., has all the rights and interests of the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Qiancuo salt lake. The company said that at present, due diligence, audit and evaluation involved in the issuance of shares and the payment of cash for asset purchases are being carried out in an orderly manner.

Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Realize the rapid production of the project. On March 5, 2022, the company announced that it signed the "expanding Test Cooperation Agreement on the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx After continuous and stable operation for 168hours, and the product reached the agreed technical target, the subsequent annual production expansion of 8000 tons of lithium carbonate equivalent in the development of LXXXVI Qiancuo Salt Lake was carried out. On July 1, the company's official account said that after the first three sets of electrochemical de-intercalation devices of the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx At present, the project has completed the construction of a workshop with an annual output of 2000 tons of lithium carbonate and the installation and commissioning of the first batch of electrochemical deintercalation devices, laying a solid foundation for the mass production of qualified refined lithium carbonate products in July. On the basis of the successful construction of the workshop with an annual output of 2000 tons, the two workshops of the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Continue to distribute domestic and foreign lithium resources with strong growth potential

On September 23, 2021, the company signed a "Cooperation Framework Agreement" with Li Fengying, Zhong Xiufang, Li Songbin and their wholly-owned subsidiaries Chenyu Mining Co., Ltd., BABA Prefecture, Tibet, intending to sell a 51% stake to Jinyuan New Energy. Chenyu Mining has a boron-magnesite mining license issued by the Department of Land and Resources of Tibet Autonomous region, with a mining area of 12.7765 square kilometers. The mine is located in Jiaochaka Salt Lake, Gaize County, Tibet, with a reserve of 102392 tons of lithium chloride (average content 2301.75mg/l) in brine. According to the approval of the Department of Land and Resources of Tibet Autonomous region on the increase of mining types by Chenyu Mining Co., Ltd., BABA area, Tibet, it is agreed that the target company will increase the mining of salt lake lithium and potash deposits, and the target company is applying for a new mining license. Although the exclusive period has passed, the two sides continue to maintain friendly relations, and the above-mentioned agreements are still under active negotiation. On May 6, 2022, the company announced that its subsidiaries Zhejiang Jinyuan Zhongke Lithium Co., Ltd., Xinwanda Electronics Co., Ltd. And Guizhou Chuanheng Chemical Co., Ltd., signed a "Project exclusive due diligence Agreement" with V í ctor Pablo Zoltan and Sergio Zoltan Barroso, intending to acquire V í ctor Pablo Zoltan and Sergio Zoltan Barroso to sell their Argentine Goldinka Energy S.A. Part of the equity of the company. According to the company announcement, Jinyuan shares are proposed to be acquired by Argentina Goldinka EnergyS.A. The three mining projects of Kaias, LagunaCaro, LaMula, LaVerde and LaVela owned by the company cover an area of 1400 square kilometers, 4500 hectares and 3500 hectares respectively. The two projects Kaias and LagunaCaro have obtained preliminary exploration permits, LaMula and LaVerde., The LaVela project has obtained all rights. At present, preliminary geological work such as prospecting and geophysical exploration has been completed, and relevant reports have been submitted. On June 21, the company issued a progress announcement that the parties to the transaction had reached a series of preliminary consensus based on the preliminary due diligence results, and the parties to the transaction had clearly agreed to extend the due diligence period by 14 working days by email. During this period, the parties to the transaction continue to discuss and communicate in depth on the details of the transaction, in order to reach a consensus and formally sign the relevant acquisition agreement. Once the acquisition of the above domestic and foreign salt lake projects is completed, the company will accelerate investment and have great potential for capacity growth in the later stage.

Investment suggestion

At present, the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxqiancuo salt lake lithium extraction project has completed the construction of lithium carbonate workshop and the installation and commissioning of the first batch of electrochemical deintercalation devices, which laid a solid foundation for the mass production of qualified refined lithium carbonate On the basis of the successful construction of the workshop with an annual output of 2000 tons, the two workshops of the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Up to now, the price of battery-grade lithium carbonate is 47-480000 yuan / ton, and in the second half of the year, with the fading of the impact of the epidemic, the new energy industry chain is willing to rush to make up for the production loss caused by the epidemic from March to May. The acceleration of downstream production will increase lithium salt consumption and drive lithium salt prices back up, which does not rule out the possibility that lithium salt prices will hit a new high in the 2022Q4/2023Q1 peak season. The release of the company's capacity coincides with the high price of lithium salt and is expected to release results quickly. We forecast that the company's operating income from 2022 to 2024 will be 7.907 billion yuan, 10.91 billion yuan and 11.682 billion yuan respectively, representing year-on-year growth of-9.5%, 38.0% and 7.1%, respectively. The net profit of home ownership was 422 million yuan, 2.205 billion yuan and 2.163 billion yuan respectively, up 388.6%, 423.0% and-1.9% respectively over the same period of last year. The net profit per share was 2.77 yuan per share, corresponding to the closing price of 21.04 yuan per share on July 7, and the PE was 397ex8X for the first time. [Huaxi Environmental Protection and low carbon-Huaxi Building Materials Joint cover]

Risk hint

1) lithium salt production capacity construction is not as expected; 2) lithium salt prices are declining rapidly; 3) solid waste and hazardous waste disposal prices are lower than expected; 4) major changes have taken place in environmental protection policy; 5) the proposed acquisition of 49% equity interest in Tibet BABA Liyuan Mining Development Co., Ltd. and the continued distribution of domestic and foreign lithium resources have not yet been completed, there is uncertainty.