The company released the mid-year report of 2022, making a profit of 305 million yuan in the first half of the year, down 14% from the same period last year. The company actively arranges the ternary precursor business and is expected to benefit from the volume of ternary materials in the future; maintain the holding rating.
Support the main points of rating
The company's profit in the first half of 2022 decreased by 14% compared with the same period last year: the company released its semi-annual report in 2022, making a profit of 305 million yuan in the first half, down 14.22% from the same period last year, and deducting 328 million yuan from non-profit, down 16.23% from the same period last year. According to the semi-annual performance measurement, the company's 2022Q2 achieved a profit of 132 million yuan, a decrease of 24.25% from the previous month and 48.57% from the same period last year; the deduction of non-net profit was 101 million yuan, a decrease of 55.30% from the previous year, and a decrease of 42.75% from the same period last year.
The main business remained stable, the volume and profit of cobalt products rose, and the profits of copper products were under pressure: the new energy vehicle industry continued to develop rapidly, the company's production capacity and output increased significantly compared with the same period last year, and the company produced and sold both cobalt and copper products in the first half of 2022. The company is also affected by fluctuations in international commodity prices, putting pressure on the profits of copper products. In terms of products, the company's cobalt products achieved operating income of 1.502 billion yuan in the first half of the year, an increase of 27.08% over the same period last year, with a gross profit margin of 33.63%, an increase of 0.79% over the same period last year; copper products achieved operating income of 1.282 billion yuan, an increase of 42.87% over the same period last year, and a gross profit margin of 20.35%, down 11.80% from the same period last year.
The construction of the project is advancing steadily, and the capacity layout is improving day by day: the company is actively increasing production capacity, and various major projects are advancing steadily. Among them, 5000 tons of cobalt powder technical renovation project was put into production in March 2022, the production capacity increased from 3000 tons to 5000 tons; 5000 tons of cobalt hydroxide project was put into production in June 2022, and the total production capacity of cobalt hydroxide reached 10,000 tons. The first phase of the 10,000-ton metal cobalt new material and 26000-ton ternary precursor project completed civil engineering and equipment installation. The completion and commissioning of the above projects will further enhance the competitiveness of the company's industry.
Valuation
Under the current equity, combined with the company's mid-2022 report and industry supply and demand, we adjust the company's forecast earnings per share for 2022-2024 to 2.36x04xx3.40 (the original forecast diluted earnings per share is 3.92xpx 4.14xpp 4.38), corresponding to a price-earnings ratio of 24.3x18.9xpx; maintain the overweight rating.
Main risks faced by rating
Demand for new energy vehicles fell short of expectations; global cobalt mining exceeded expectations; price competition exceeded expectations; technology iteration risk; overseas operation and exchange rate risk; COVID-19 epidemic impact exceeded expectations.