It is proposed to award 1 million restricted shares at $12.28 per share. According to the September 29 announcement, the company's board of directors deliberated and passed the “Proposal to Grant Reserved Benefits of the 2022 Restricted Stock Incentive Plan to Incentive Targets” and determined that September 29, 2022 would be the grant date of the reserved benefits, and that 1 million restricted shares would be granted to 125 eligible middle managers and technical (business) executives at a grant price of 12.28 yuan/share. The year for the lifting of sales restrictions on reserved interests was 2022-23. The first sales restriction period performance assessment target was that the company's net profit in 2022 was not less than 500 million yuan, and the second sales restriction period performance assessment target was that the company's net profit in 2023 was not less than 800 million yuan. We believe that this incentive will help further improve the corporate governance structure, bind the interests of core employees, and further stimulate the company's business vitality.
Lay out new energy industry clusters based on resources. 1) Focusing on the “phosphorus and fluorine” resources in phosphate ores, the focus is on developing phosphorus-based battery materials (based on high-quality phosphate resources, using multiple combination technologies to develop iron phosphate for batteries through the “integrated mineralization” model. According to the announcement on September 16, the company's 100,000 tons/year battery iron phosphate project has been successfully tested. Joint ventures established with Guoxuan Holdings and Sunwoda respectively are promoting the implementation of iron phosphate projects) and fluorine-based electrolyte raw materials (developing lithium hexafluorophosphate based on anhydrous hydrogen fluoride as a by-product). 2) Cooperate with Jinyuan Co., Ltd. and Sunwoda Co., Ltd. to deploy lithium resources in Argentina, which is expected to form resource support for “left phosphorus and right lithium”. 3) Participated in the Wanpeng era and entered the lithium iron phosphate field. 4) The Institute of Engineering Technology formed a research team for sodium iron phosphate batteries.
It is proposed to raise 3,529 billion yuan in non-public offerings to promote the construction of new energy projects. According to the announcement on September 29, the company plans to publicly issue no more than 100 million shares (including principal) and raise no more than 3,529 billion yuan (including capital). Of this, 1,295 million yuan will be used for the comprehensive utilization of medium- and low-grade phosphate ore to produce 120,000 tons/year food-grade purified phosphoric acid project, 659 million yuan will be used for the 100,000 tons/year food-grade purification phosphoric acid project, and 1,056 million yuan will be used to supplement liquidity, and 800 million yuan will be used to repay bank loans. Through the implementation of fund-raising projects, it is expected that the construction of the company's iron phosphate production line will be accelerated, the product structure of the phosphorus chemical sector will be enriched, and the company's industrial chain layout will be improved. At the same time, after the completion of this non-public offering, the company's capital strength will be further strengthened, the balance ratio will drop, and the capital structure will be further optimized.
Profit forecasts and investment ratings. We expect the company's net profit for 2022-2024 to be $8.12 (maintenance), $13.44 (maintenance), and $1,682 (maintenance), respectively, and EPS of $1.62, 2.68, and 3.36 yuan, respectively. Referring to the valuations of comparable companies in the same industry, the company was given 24 times PE in 2022, corresponding to the target price of 38.92 yuan (maintenance), maintaining the “superior market” rating.
Risk warning. Project commissioning progress fell short of expectations, product prices fluctuated greatly, and downstream demand fell short of expectations.