Event description
The company released the 2022 medium report that 2022H1 realized operating income of 2.793 billion yuan, + 34.28% compared with the same period last year; realized return net profit of 305 million yuan,-14.22% year-on-year; and realized deduction of non-return net profit of 328 million yuan, year-on-year-16.23%. 2022Q2 realized operating income of 1.22 billion yuan, year-on-year + 16.86%, month-on-month ratio-22.46%; realized return-home net profit of 132 million yuan, year-on-year-48.57%, month-on-month ratio-24.25%; realized non-return net profit of 101 million yuan, year-on-year-42.76%, month-on-month ratio-55.30%.
Event comment
Both volume and price rose, and revenue grew in the first half of the year compared with the same period last year. Metal prices rose sharply in the first half of 2022 compared with the same period last year, with the average prices of SHFE copper and metal cobalt + 7 per cent and + 49 per cent respectively year-on-year. At the same time, the company's 6000-ton electrowinning copper project was put into production at the end of 2021; the annual output of 5000 tons of cobalt powder was put into production in March 2022, the production capacity of cobalt powder increased from 3000 tons to 5000 tons, and the output of copper and cobalt increased compared with the same period last year. In terms of products, the operating income of copper and cobalt was 12.82 yuan and 1.502 billion yuan respectively, which was + 43% and + 27% compared with the same period last year. Copper and cobalt price pressure is greater, Q2 revenue has declined compared with the previous month. The average price of 2022Q2 SHFE copper and metal cobalt is-0.12% and-9% respectively, which is higher than-13% and-31% at the end of Q1. The company's 5000-ton cobalt hydroxide project was put into production in June 2022, and it still takes time to climb the slope, Q2 increased or not obvious, and revenue declined under the pressure of falling prices.
Capacity climbing superimposed inventory prices, the company's profitability fell slightly in the first half of the year compared with the same period last year. 2022H1 achieved a gross profit margin of 27.51%, year-on-year-5.02pct, sub-product point of view, cobalt product gross profit margin of 33.63%, year-on-year + 0.79pct, basically flat; copper product gross profit margin of 20.35%, year-on-year-11.8pct, a large decline. The raw material end of the company mainly comes from leasing mining and purchasing copper and cobalt ore. Historically, the company's copper gross profit margin can basically be maintained at around 30%, and the sharp decline in the first half of the year may be mainly due to the high initial cost of 6000 tons of Electrodeposited copper production at the end of last year and the rapid decline in copper prices in the second quarter. High operating costs caused by high inventory. 2022Q2 achieved a gross profit margin of 26.2%, month-on-month-2.33pct, or mainly due to the rapid decline in copper and cobalt prices in the second quarter of the year. At the same time, the company lost 28.9732 million yuan in asset impairment due to the decline in inventory prices in the second quarter, which is a certain drag on profits.
The dark moment has passed, and we look forward to the long-term growth improvement brought about by the positive transformation of the company under price stabilization. Looking back on the second quarter, the downturn in demand led to a sharp correction in cobalt prices. In the third quarter, with the acceleration of the demand for new energy vehicles, the warming of the bottom of consumer electronics demand, and the strong demand for alloy and magnetic materials, the overall demand for cobalt will show a month-on-month pick-up trend compared with the second quarter. Although the long-term supply side due to the commissioning of China Molybdenum Kisanfu, the further production of the Tenke mixed ore project and the continued release of cobalt associated with wet-process nickel in Indonesia, there is still some excess pressure, and the risk of rapid and substantial downward prices has been significantly released. Copper prices have also shown a rapid and deep correction in anticipation of a recession since June. In the long run, benefiting from the copper demand boosted by new energy demand, copper demand will continue to maintain positive growth, the supply side will be constrained by the downturn in capital expenditure, and the global cost curve will continue to rise, the long-term copper price center will still show an upward trend. After the price risk is greatly released and gradually stabilized, we should pay more attention to the support of the company's own capacity expansion to the performance, as well as the positive layout strategic transformation to the company's long-term growth.
On the one hand, with the gradual climbing of copper and cobalt production capacity, the volume of the company has increased significantly; on the other hand, the company has actively sought transformation over the years. The first phase of the 10000T/a metal content cobalt new material and 26000t/a ternary precursor project has completed civil construction and equipment installation, and is currently in trial production. Hong Kong stock IPO (suspended) is also mainly planned for new energy conversion. The company is expected to return to the parent net profit of 7.6,9.3 and 1 billion in 2022-2024. At present, it is recommended to pay attention to the company's allocation performance-to-price ratio.
Risk hint
1. The production capacity is not as expected.
2. Metal prices fell more than expected.