Announcement content
The company, together with the participating subsidiaries Qinghai Jintai Potash Fertilizer and Ganfeng Lithium, jointly funded the establishment of Zhaofeng Lithium Industry and proposed to build 7000 tons of battery-grade lithium carbonate production line and 10000 tons of anhydrous lithium chloride production line. The registered capital of the joint venture company is 100 million, and the proportion of each company's contribution is 50%, 5% and 45% respectively.
Announcement and comment
Join hands with lithium materials giant, lithium carbonate production and marketing has been strongly endorsed
With the rapid development of new energy vehicles, the demand for lithium salt products, the core raw materials of lithium electricity, has increased greatly in the past two years. Zhaofeng Lithium, a joint venture company, is positioned as a battery-grade lithium carbonate manufacturer, and its main raw materials will be provided by Qinghai Jintai. And the joint venture products will be underwritten by Ganfeng Lithium. The latter, as a domestic lithium product processing giant, is expected to fully control the joint venture products in terms of technology, management, technology and other aspects, and will become a strong brand endorsement for Zhaofeng lithium industry.
Attack frequently to seize the commanding point upstream of lithium electricity.
The company's layout in the field of lithium materials is closely linked. Since November, the company has successively acquired 16.67% and 20% shares of lithium materials companies in Qinghai Jintai and Shanghai Lithium. Jintai, Qinghai has the mining license (198K) and mineral resources exploration license (275K) of Barun Mahai Salt Lake Mining area, and has the ability of comprehensive development and utilization of brine resources. Shanghai Zhongli is downstream of Jintai, and its main products are high purity lithium carbonate, lithium hydroxide and so on. at present, the production capacity of battery-grade lithium is 8000 tons, which is the core unit of the national standard of battery-grade lithium dihydrogen phosphate. The two companies are expected to form a good industrial chain coordination in the future.
A lot of money is piled up to show confidence, and there is room for imagination in subsequent acquisitions.
At present, the focus of the company's new energy business is tilting to the upstream of lithium power, and so far it has invested 775 million yuan in the establishment and participation of related targets. According to the agreement, the committed performance of Qinghai Jintai and Shanghai Zhongli from 2018 to 2019 are 150 million, 250 million (350 million in 2020) and 60 million and 94 million respectively. At the same time, the company has agreed with Shanghai Zhongli to acquire its remaining shares after it has reached the relevant terms; in addition, as a war investment, the company also has the right of follow-up priority to acquire Jintai potash.
Combined with the company's current cash reserves, we think it is possible to continue mergers and acquisitions in the future.
Profit forecast and valuation
Assuming that the performance commitments of Shanghai Zhongli and Qinghai Jintai are completed, combined with the profit calculation of Zhaofeng Lithium Industry, we expect to thicken the company's EPS0.08 of 2018-2019, and the adjusted EPS of 2017-2019 will be 0.06,0.15,0.30 respectively, corresponding to PE 65.7,26.8,13.6 times, maintaining the buy rating.
Risk hint: the progress of lithium extraction from salt lake is lower than expected, and the price of lithium salt falls rapidly.
