Rongjie shares issued an announcement: total operating income in the first half of 2022 was 987 million yuan, an increase of 194.44% over the same period last year; net profit was 576 million yuan, up 4443.99% over the same period last year; and net profit after deducting non-recurrent profits and losses was 573 million yuan, an increase of 5112.4% over the same period last year.
Main points of investment
The new energy industry is booming, and product prices have risen sharply.
The company's Q1 revenue is 478 million yuan, year-on-year + 339%, month-on-month + 27.24%, + 125%, month-on-month + 6.51%. The net profit of Q1 was 254 million yuan, compared with the same period last year, which was + 13996.3%, + 516.49%, + 516.49%, + 2861.1% and 26.77%, respectively.
Net profit increased significantly, mainly due to the sharp rise in lithium ore and lithium salt prices during the reporting period, and the trial production capacity of Chengdu Rongjie lithium industry, a lithium salt company with a stake of 40%, in the first phase of the 20,000 t / a lithium salt project.
Rongda Lithium, a subsidiary of the company's lithium mining business, sold 23000 tons of lithium concentrate (a discount of 6% grade to 18900 tons), with an average sales price of 12600 yuan / ton, which is 0.690 thousand yuan / ton higher than the average price for the whole year of 2021. The director of lithium salt business and Hua Li realized sales of 2006 tons of lithium salt, with an average price of 3097 million yuan per ton, which was 2098 million yuan higher than the average sales price for the whole year of 2021. Chengdu Rongjie Lithium Industry Phase I lithium salt project began trial production on January 1, 2022, with lithium salt sales of 4190 tons, revenue of 1.42 billion yuan and net profit of 908 million yuan in the first half of the year.
Lithium ore lithium salt business, seize the market opportunity of lithium materials, lithium ore, actively promote 2.5 million tons of mineral processing project. Rongda Lithium Industry, a subsidiary of Rongda Lithium Industry, has a mining warrant for the 134th vein of methyl kalixene mine, with mine reserves of 28.995 million tons, an average grade of more than 1.42%, and lithium reserves of about 1.013 million tons of LCE. Rongda Lithium Industry currently has a raw ore mining capacity of 105 million tons / year and an original ore dressing capacity of 450,000 tons / year, equivalent to about 70,000 tons of concentrate. In addition to the production capacity of lithium concentrate, the company is promoting the 2.5 million tons / year lithium concentrate concentration project in Kangding, which can supply about 470000 tons of lithium concentrate after being put into production.
In terms of lithium salt, Chengdu Rongjie lithium industry is expected to continue to grow. CK Hutchison Huali, which is 80% owned by the company, is located in Dujiangyan with a production capacity of 3000 tons of lithium carbonate and 1800 tons of lithium hydroxide. In the first half of the year, CK Hutchison Hua Li produced 1515 tons of lithium salt and sold 2006 tons, realizing a profit of 92 million yuan, an increase of 1230.30% over the same period last year. Chengdu Rongjie Lithium Industry has a planned production capacity of 40,000 tons / year. During the reporting period, Chengdu Rongjie Lithium Industry Phase I lithium salt project passed all acceptance tests in June 2022 and entered the formal production stage in July. Chengdu Rongjie Lithium Industry sold 4190 tons of lithium salt in the first half of the year, with revenue of 1.42 billion yuan and net profit of 908 million yuan. With the first phase of the project officially put into production, and the long-term second phase of the project will be landed, Chengdu Rongjie lithium industry is expected to continue to contribute to performance growth.
Lithium power equipment business has maintained rapid growth. Dongguan Derui, which has a 55% stake in BYD, is a lithium equipment manufacturer, which mainly ensures the delivery demand of BYD, a strategic shareholder of Diri. Dongguan Derry mainly supplies BYD with blade battery production equipment, which belongs to the high-end field and has high equipment requirements. In the first half of the year, the company's revenue from lithium equipment reached 188 million yuan, an increase of 56.11% over the same period last year.
In addition, Chengdu Rongjie Lithium Industry signed a "Lithium Carbonate supply Cooperation Agreement" with BYD in June this year, further deepening cooperation with BYD.
Profit forecast
It is predicted that the return net profit of the company from 2022 to 2024 is 17.91,26.95,4.005 billion yuan respectively, and the EPS is 6.90,10.38,15.42 yuan respectively. The current stock price corresponding to PE is 18.2,12.1 and 8.1 times respectively, giving a "buy" investment rating.
Risk hint
1) the downstream demand is lower than expected; 2) the progress of capacity construction is not as expected; 3) the epidemic affects the start of construction.