The company released its three-quarter report in 2022, making a profit of 254 million yuan in the first three quarters, down 47.82% from the same period last year. The company released its performance due to fluctuations in raw material prices, continuously improved its precursor layout, and maintained its overweight rating.
Support the main points of rating
The company's profit in the first three quarters of 2022 decreased by 47.82% compared with the same period last year: the company released the third quarterly report of 2022, with revenue of 3.96 billion yuan in the first three quarters, an increase of 23.60% over the same period last year; a profit of 254 million yuan, down 47.82% from the same period last year; and a deduction of 284 million yuan for non-profit, down 47.71% from the same period last year. According to the performance measurement, 2022Q3 made a profit of-51.4308 million yuan, a decrease of 139.40% compared with the previous month, a decrease of 139.11%; a non-profit deduction of-43.7672 million yuan, a decrease of 128.85% and 143.25% compared with the previous month.
Raw material price fluctuations affect the performance release, continue to promote the precursor layout: the company benefits from the sustained and rapid development of the new energy vehicle industry, cobalt and copper products production and sales are booming. According to our estimates, the company shipped about 2000 tons of cobalt powder products in the first three quarters, including 740 tons in the third quarter, up 26% from the previous quarter; copper products shipped about 33000 tons, of which 10600 tons in the third quarter, up 45% from the previous quarter. At the same time, the company is also affected by international commodity price fluctuations, cobalt prices fell sharply, affecting the company's performance release. In addition, the company actively promoted the integrated layout, after issuing an announcement and signing a "cooperation memorandum" with Huabao Industrial Park, the two sides reached a memorandum on cooperation in the construction of 60,000 tons of high-pressure nickel leaching project.
The net cash flow of operation improved significantly, and the expense rate decreased during the period: the company continued to improve its operating capacity, and the net cash flow generated by operating activities in the first three quarters was 1.052 billion yuan, a substantial increase of 373.53% over the same period last year.
The company continued to promote cost reduction, and the cost control was better. In the first three quarters, the company's period expense was 243 million yuan, and the period expense rate was 6.15%, of which the period expense in the third quarter was 53 million yuan, and the period expense rate was 4.49%, which was 0.8% lower than the same period last year and 3.71% lower than the same period last year.
Valuation
Under the current equity, combined with the company's quarterly report for 2022-2024 and the supply and demand situation of the industry, we adjust the company's forecast earnings per share for the period from 2022 to 2024 to 1.33, 1.73 and 2.18 yuan (the original forecast diluted earnings per share is 2.36), corresponding to a price-earnings ratio of 31.7, 24.4 and 19.4 times, and 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.