Event: the company issued a 2022 semi-annual performance forecast, the first half of the year is expected to achieve a net profit of 5.3-630 million yuan, of which Q2 realized a net profit of 2.8-380 million yuan.
The company Q2 lithium salt is sold, and the results in the second half of the year are expected to be more significantly released. The company's Q2 home net profit center is 330 million yuan, an increase of nearly 29 times compared with the same period last year, with a month-on-month ratio of + 28%. Chengdu Rongjie lithium industry Q2 lithium salt sales are expected to be low, on the one hand, affected by the epidemic, on the other hand, considering the relatively low lithium price in May (from 500000 in April to about 460000 in May), the company may have a periodic withholding behavior. At present, in the normal mining of methyl card mines, Chengdu Rongjie lithium salt project is also in normal production, Q2 sales may make the company's lithium salt shipments concentrated in the third and fourth quarters, and lithium prices are expected to continue to rise in the second half of the year, the company's performance in the second half of the year may be more significant.
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 project is expected to be completed and 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, converted to 25000 tons LCE, basically matched with Chengdu Rongjie's existing phase 20, 000 tons of lithium salt capacity. 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.
Lithium prices are expected to rise further in the second half of the year, and lithium supply and demand will remain tight or keep lithium prices high in the future. 1) short-term: with the arrival of the peak season of electric vehicles in the second half of the year, the production schedule of all links of the industrial chain is gradually strengthening, but the supply increment is relatively limited. It is expected that the month-on-month growth rate of demand in the second half of the year will exceed that of supply, and lithium prices are expected to rise further under the tightening of supply and demand. 2) in the medium term: lithium supply and demand is still in tight balance this year and next, while considering the replenishment demand and the mid-stream expansion tide and other factors, the actual supply and demand is tight, supporting the lithium price remains high; 3) long-term: with the development of low-grade mines, the right side of the lithium cost curve may rise sharply in the future, and in the long run, the lithium price may be maintained at 20W +.
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.