The current situation of the company
The company announced that the technical transformation of the lithium carbonate production line of the subsidiary Yichun Silver Lithium New Energy was successful.
Comment
The new production line has been successfully put into production, and the production capacity will begin to climb gradually. The company's new production line has been put into mass production since it was ignited last week. At present, the production line is running normally, the battery-grade lithium carbonate products produced by the new production line meet the national standards, and the key indicators such as lithium recovery rate, per ton cost and environmental protection emissions meet or exceed the design target. After a few days of operation, the production line has been raised to about 70 per cent of the designed capacity, after which it will gradually climb to reach a capacity of 5000 tons of lithium carbonate. The success of this technological transformation has also laid a successful foundation for the company's upcoming increase of 10,000 tons of lithium carbonate production capacity in the future.
The success of technological transformation will greatly improve the performance of the company. Through years of research and development experiments, the technical transformation of lithium carbonate production line is successful, the production capacity is expected to increase to 5000 tons, and the cost is expected to drop from 90, 000 yuan to 70, 000 yuan / ton. If the company's lithium mica mining can be matched, the cost is expected to further reduce. At the same time, the company is actively promoting the expansion of lithium carbonate production line. According to the company plan, the lithium carbonate production capacity of 1H18 company lithium mica is expected to reach 15000 tons.
In addition, the company cooperates with Baowei Materials to use spodumene to produce lithium carbonate, which is expected to form a production capacity of 10, 000 tons of lithium carbonate and 5000 tons of lithium hydroxide in 2018. After reaching full production, the company's lithium carbonate + lithium hydroxide production capacity will reach about 30,000 tons, the performance flexibility is very large.
Large orders in Kowloon are expected to boost growth throughout the year. 1H17 was affected by the policy adjustment, and the revenue of new energy vehicles fell 78.4% to 111 million yuan compared with the same period last year. However, recently, the company has signed two large orders for Yinlong and national transport capacity, totaling 4 billion yuan, which will be completed by the end of 2018. We expect order delivery to start at 3Q17, and the bus and logistics vehicle market to pick up from June. Kowloon is expected to fulfill its performance commitment of 221 million yuan for the rest of 2017 and achieve high performance growth in 2018.
Valuation proposal
We keep our profit forecast unchanged. Maintain the target price of 18.34 yuan and maintain the recommendation.
Risk.
The production and sales of new energy vehicles are lower than expected; the expansion of lithium carbonate production has slowed down.