Event: the company released its three-quarter report in 2022, with revenue of 894 million yuan in the first three quarters, + 15.8% year-on-year, and net profit of 127 million yuan, + 254.3%, compared with the same period last year. Q3 realized revenue of 360 million yuan, month-on-month ratio of + 27.2%, net profit of 71 million yuan, month-on-month ratio of + 86.8%.
The volume and price of lithium products have risen by a large margin, and the traditional protection business has risen steadily. 1) the investment income contributes most of the profits. The investment income of Q1-Q3 in the joint venture / joint venture was 0.13,0.17 and 28 million yuan respectively (mainly from Tiancheng lithium industry), accounting for 67%, 44% and 40% of the net profit.
On the one hand, the high investment income is due to Tiancheng Lithium Industry's gradual climbing of the 10,000-ton LCE lithium sulfate production line to increase production and sales; on the other hand, it is due to rising lithium prices, with Q1-Q3 SMM lithium carbonate prices of 42.9,472,482,000 yuan / ton respectively; and 2) traditional protection business gives strong support to the performance. After deducting the investment income, the profit of the company Q1-Q3 is 0.06,0.21 and 42 million yuan respectively, and the performance is excellent.
The reason for the larger increase in Q3 may be that the profits from the acquisition date of Tiancheng Lithium Industry to the end of Q3 were included in the consolidated statement after the company realized its holding of Tiancheng Lithium Industry in September.
The successful transformation of lithium power high-quality track, mining and metallurgical integrated layout gradually improved. 1) participate in African lithium mine and enjoy annual sales of about 24000 tons of LCE concentrate. In June, the company indirectly acquired a 7.23% stake in the African Bougouni lithium mine and an underwriting right of not less than 80% through the transfer of 100% property share of Taian Xinchang. Bougouni lithium ore resources 585000 tons LCE, grade 1.11%; planned annual production of 238000 tons of lithium concentrate (~ 30,000 tons LCE), or raw ore production in 2023; 2) holding Tiancheng lithium industry layout mica lithium extraction, with lithium sulfate production capacity of 10,000 tons LCE/ years. At the end of September, the company increased its stake in Tiancheng lithium industry to 51%. Tiancheng lithium industry mainly through the procurement of lithium mica to prepare lithium sulfate solution (lithium carbonate front-end raw material), the current production capacity of 10,000 tons of LCE;3) to set up a subsidiary Xiecheng lithium industry, the construction of back-end lithium salt production line. In January, the company established a subsidiary, Xiecheng Lithium Industry (50.1% equity), and is under construction of 6000 tons of lithium carbonate and 6000 tons of lithium hydroxide projects. It is expected that the lithium carbonate production line has entered the stage of trial production.
Equity incentive strengthens performance to release certainty, and lithium business is the main growth point in the future. 1) the landing of the equity incentive plan: in October, the company announced that it planned to grant 4.35 million restricted shares to 43 employees at the grant price of 23.57 yuan per share and 5.548 million stock options to 59 employees at the exercise price of 37.7 yuan per share. The unlocking condition is that the company's net profit in 2022-2024 is not less than 1.86,3.0 and 470 million yuan, corresponding to a year-on-year growth rate of 221%, 61% and 57%. 2) Lithium business will contribute to the main profit: Tiancheng Lithium Industry promises to deduct non-net profit of not less than 1.8,2.0 and 210 million yuan from 2022 to 2024, which will become the company's main source of performance growth.
Profit forecast and investment suggestion: the net profit is expected to be 1.91 million yuan in 2022-2024.
Taking into account the company's entry into the high-growth lithium circuit, it covered and rated "overweight" for the first time.
Risk hint: the demand of the industry is lower than expected, the supply is higher than expected, and the company's production capacity is not as expected.