Incident: The company announced that it achieved revenue of 5.61 billion yuan in 2022, a year-on-year decrease of 36.6%. The net profit of the mother was -210 million yuan, of which lithium resource revenue reached 3.177 million yuan. Q1 2023 achieved revenue of 770 million, a year-on-year decrease of 22.82%, and net profit of the mother was -15 million.
Comment:
The first batch of lithium carbonate was produced at Bajiancuo Salt Lake, with revenue of 3.177 million yuan, achieving a breakthrough of 0-1.
The company started with the building materials business, transformed into the environmental hazardous waste industry in 2015, and began a strategic transformation of the new energy industry in 2021. The lithium carbonate business was built around the operation model of “upstream mining, downstream recycling, two-wheel drive strategy”, and completed the construction of a 2,000 ton production line in 2022, achieving sales of 10.88 tons and revenue of 3.1772 million yuan. Furthermore, the company changed its business scope, added metal ore sales, etc., demonstrating its determination to transform. Affected by the epidemic in 2022, production line construction was relatively slow. In 2023, production capacity construction of 8,000 tons will continue to be accelerated, and the operation of a 10,000-ton production line will be realized as soon as possible.
With the acquisition of Salt Lake in Argentina, lithium resource reserves have reached a new level. Argentina's salt lake project is progressing rapidly. The initial screening of more than 70 salt lakes in Argentina was completed in July 2022. On July 18, the company purchased the Laguna Caro mine rights under Goldinka's name for 27 million dollars, with a total area of 4,514 hectares. According to preliminary estimates, the lithium resource content of the mine was 50-1 million tons. On November 12, 2022, 100% of HANCHA's shares were acquired with $2.48 million of its own capital. It owns the MinaPayo Salvación mining rights, which are located in Cauchari-Olaroz salt lake. The overseas salt lake layout helps the company achieve the 515 plan and enhance the company's competitiveness.
Investment advice: We expect the company's revenue in 2023-2025 to be 63.8/70.5/7.43 billion yuan respectively, with a year-on-year growth rate of 13.7%/10.5%/5.4%. Guimu's net profit was $0.7/165/254 million, respectively, up 132%/145%/53% year on year. EPS is 0.09/0.21/0.33 yuan, and PE corresponding to the current stock price is 99/40/26. Give a “hold” rating.
Risk warning: The release of the company's salt lake production capacity fell short of expectations; downstream demand fell short of expectations.