Event: the company issued a forecast of results for the first three quarters of 2022, which is expected to achieve a net profit of 12-1.3 billion yuan, an increase of 4330.99% and 4700.24% over the same period last year, of which the net profit in the third quarter was 6.27-727 million yuan, with a median of 677 million yuan, an increase of 110% over the previous quarter.
Lithium prices continued to rise, the company's lithium concentrate, lithium salt and lithium equipment and other business profits increased significantly, consumption under control of the epidemic gradually recovered, the prosperity of the new energy industry continued to improve, while the price of upstream lithium products supported by supply and demand continued to rise, the company's ore and smelting production and marketing advanced steadily, and the business income and profits of lithium concentrate, lithium salt and lithium power equipment all increased significantly.
The price of lithium carbonate for batteries has exceeded the previous high of 530,000 yuan / ton, and the participating company Chengdu Rongjie has achieved a volume and price rise. Since September, the average price of battery-grade lithium carbonate has reached 525,000 yuan / ton, a record high compared with + 2.94%. Australia's CoreLithium completed its first spodumene ore auction at US $951 per ton, showing the scarcity of lithium resources and supporting persistently high lithium prices. Whether overseas or domestic or concentrate lithium salt, there is almost no rapid release increment in the short term, while downstream demand remains strong and resilient, with high quality lithium resources, high self-supply rate and high performance growth and low valuation of integrated lithium enterprises. The price of lithium carbonate remains high and continues to rise, and the company's profit release is expected.
After landing, the Yuanyangba project company has an annual mining capacity of 1.05 million tons + 450000 tons of mineral processing capacity, with a concentrate capacity of about 70-80,000 tons; the Yuanyangba 2.5 million-ton mineral processing project is actively under progress. the upper planning Kang-Yi industrial concentration zone has been announced before the approval of the EIA, and the company's Yuanyangba project is expected to accelerate in the near future, and then accept and approve the process to build. After the landing of the project, the company will have the corresponding lithium concentrate capacity to expand to 190,000 tons / year; considering that the future government coordination of raw ore or the company is expected to apply for mining capacity expansion to match mining capacity, 2.5 million tons of mining capacity corresponding to lithium concentrate capacity may reach 470000 tons, discounted LCE6 more than 10,000 tons, concentrate production capacity will be greatly increased.
Investment suggestion: the company's lithium resource endowment is superior, and the lithium smelting capacity of integrated lithium mining and separation is expanding in an orderly manner. Yuanyangba 2.5 million-ton selected project is announced before the approval of EIA that the project is expected to speed up construction, and the supply and demand of lithium products are tight. The high performance of lithium price releases, the annual net profit of homing in 22-23-24 is 2.037 billion yuan respectively, and the current market value PE is 4.291 billion times that of 14-9-7. Maintain a "buy" rating.
Risk hints: political policy risks; capacity expansion and product development are not as expected; the development of new energy vehicles is not as expected; disruptive breakthroughs have occurred in related technologies; and product prices have fallen more than expected.