Overview of events
On August 25, 2022, the company released a semi-annual report that during the reporting period, the company achieved revenue of 2.804 billion yuan, down 39.25% from the same period last year (after adjustment, the same below); the net profit of returning home was 24.29 million yuan, down 87.88% from the same period last year; deducting 14.09 million yuan from non-net profit loss from profit to loss; basic earnings per share is 0.0311 yuan.
Analysis and judgment:
Strategic withdrawal from the building materials cement industry, focusing on the expansion of lithium resources business.
2022H1, the company's revenue decreased by 39.25% compared with the same period last year, mainly due to the impact of the epidemic, the volume and price of building materials business fell; the product structure of the comprehensive utilization of solid and hazardous waste resources was adjusted, and the revenue decreased greatly. Among them, the revenue of building materials and cement business reached 800 million yuan, down 26.76% from the same period last year; the revenue of environmental protection business reached 1.991 billion yuan, down 39.56% from the same period last year. During the reporting period, based on the decline in the prosperity of the real estate industry and considering the actual situation of the company, the company strategically withdrew from the traditional building materials cement business. The company announced on January 26, 2022 that it planned 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 plan from June 12, 2022 to June 17, 2022. Jinyuan Group, the company's controlling shareholder, delisted in the second round of public listing and confirmed that the delisting transaction price was 1.7244 billion yuan. at the same time, the transferee accepts 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. The company held the 17th meeting of the Tenth Board of Directors on June 23, 2022 to examine and approve the proposal of Jinyuan Environmental Protection Co., Ltd. on the signing of the Equity transfer Agreement and related transactions with conditions coming into effect by wholly-owned subsidiaries. The above motion was examined and adopted at the second interim shareholders' meeting of 2022 held on July 11, 2022, achieving the strategic goal of divesting the building materials business. 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.
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According to the company's semi-annual report, 2022H1, the company has completed the construction of 2000 tons of lithium carbonate workshop and the installation and commissioning of the first batch of electrochemical deintercalation devices. Lxxxxxxxxxxxxxxxxxxxxx Qiancuo Salt Lake has produced qualified refined lithium carbonate products in July. Reviewing the construction process of the lithium extraction project from the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxuo salt lake lithium extraction project, the company announced on January 6, 2022, its On July 1, the company's official account said that on the basis of the successful construction of a workshop with an annual output of 2000 tons, the two workshops of the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx At that time, the salt lake will reach a capacity of 10,000 tons per year. At the same time, the company plans to acquire the remaining 49% stake in BABA Liyuan by issuing shares and cash payment, making the proportion of interests held by listed companies in LXXXVI Qiancuo Salt Lake up to 100%, thickening the performance of listed companies.
Continue to promote new energy 515 planning, the first overseas salt lake project landed 2022H1, the company organized a number of teams to negotiate overseas lithium resources projects, as soon as possible to promote the process of overseas exploration and acquisition of lithium resources. On July 18, the company announced that Zhejiang Jinhengwang Lithium Co., Ltd., a subsidiary of the company, acquired the Laguna Caro mining rights project of Goldinka Energy Company of Argentina through the establishment of an agent company, brilliant Lithium Industry. According to the company announcement, the Laguna Caro project is located in the Argentine province of Catamarca, near the Hombre Muerto salt marshes, covering an area of 4500 hectares. Goldinka has obtained a preliminary exploration license and has completed and submitted a preliminary exploration result report according to law, and is currently submitting an investment plan and an environmental impact report to apply for further exploration. Approval is expected within the next three to six months. According to the company announcement, brilliant Lithium has hired relevant experts to sample and evaluate the Laguna Caro mining rights. According to the sampling results, the lithium content of the mining rights is estimated to be 500000-1 million tons. In addition to the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx July 25, the company announced that subsidiary Zhejiang Jin Hengwang Lithium Co., Ltd. and HANAQARGENTINAS.A., HANCHA S.A. Jin Hengwang intends to acquire HANCHAS.A by signing the exclusive full Adjustment Agreement. 100% of the shares of the company, including, but not limited to, the mining right "Mina:Payo Salvaci ó n-Mining right No. N° 22.230" registered with the Salta Provincial Mining Court, which is located in Cauchari-Olaroz Salt Lake, Salta Province, Republic of Argentina. Jin Hengwang will conduct due diligence on HANACHA and Mina PayoSalvaci ó n within 60 days after signing this exclusive agreement in order to finally decide whether to sign a formal binding agreement. According to the post-acquisition investment plan and cooperation mode disclosed in the announcement, after the formal agreement is signed, Jin Hengwang will decide on the follow-up development and operation plan of the Mina Payo Salvaci ó n project based on the exploration results report (including, but not limited to, an additional investment of US $50,000,000-100,000)., A pilot plant with an annual output of 1000-2000 tons will be developed and built by ourselves. The signing of the "exclusive full Adjustment Agreement" will help to promote the process of the company's overseas exploration of lithium resources and speed up the reserve of foreign lithium resources. In the second half of the year, the company will speed up the construction of other domestic and overseas projects and the output of batch lithium carbonate products, speed up the realization of the company's industrial layout and development in the field of new energy materials, and better and faster implement the new energy 515 plan. further enhance the company's core competitiveness and sustainable profitability.
Investment suggestion
At present, the Lxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx In the second half of the year, the company will speed up the construction of lithium salt production capacity and "put into production as soon as possible and produce as much as possible". On the industry side, the lower reaches of the second half of the year will gradually enter the peak season, which will accelerate the rise in lithium prices, and do not rule out the possibility of setting 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 achieve high performance growth. We maintained our previous profit forecast and maintained the company's operating income of 7.907 billion yuan, 10.91 billion yuan and 11.682 billion yuan respectively from 2022 to 2024, representing year-on-year growth of-9.5%, 38.0% and 7.1%, respectively. The net profit of homing 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 last year, corresponding to the closing price of 17.78 yuan per share on August 24 and the "buy" rating maintained by PE. [Huaxi Environmental Protection and low carbon-Huaxi Building Materials Joint cover].
Risk hint
1) Lithium salt production capacity construction is not as expected.
2) the price of lithium salt is declining rapidly.
3) the disposal price of solid waste and hazardous waste is lower than expected.
4) significant changes have taken place in environmental protection policy
5) the proposed acquisition of 49% stake in Tibet BABA Liyuan Mining Development Co., Ltd. has not yet been completed, and there is uncertainty; 6) overseas lithium resources acquisition is not as expected.