Events: (1) the company released its 2021 annual report that its operating income in 2021 was 644 million yuan, an increase of 68.18% over the same period last year, of which 2021Q4 revenue was 207 million yuan, an increase of 67.19% over the same period last year, down 1.40% from the previous year. The net profit of homing in 2021 was 140 million yuan, an increase of 388.89 percent over the same period last year, of which the net profit of 2021Q4 was 12 million yuan, an increase of 286.14 percent over the same period last year and a decrease of 85.62 percent from the previous year.
The non-return net profit deducted in 2021 was 112 million yuan, an increase of 302.98% over the same period last year, of which 2021Q4 deducted the non-return net profit of-16 million yuan, down 25.18% from the same period last year and 119.17% from the previous year. (2) according to the quarterly report of 2022, the operating income of 2022Q1 is 353 million yuan, an increase of 159.18% over the same period last year and 70.13% over the previous year. The net profit of 2022Q1 was 132 million yuan, an increase of 557.72% over the same period last year and 975.84% month-on-month growth. 2022Q1 deducted non-return net profit of 126 million yuan, an increase of 519.80% over the same period last year and 874.10% month-on-month growth.
The volume and price of lithium products have risen, and the gross profit per ton has increased significantly. (1) Price: in 2021, the income per ton, cost per ton and gross profit per ton of lithium products are 4.11 yuan per ton, 1.71 yuan and 24,000 yuan per ton respectively, with year-on-year changes of + 36.73%,-43.84% and + 6289.90%. (2) production and marketing: in 2021, the company produced 9016 tons of lithium products, an increase of 89.95% over the same period last year, and sales of 7865.67 tons, an increase of 964.19% over the same period last year.
In terms of breakdown, sales of industrial-grade lithium carbonate were 408.05 tons, an increase of 270.47 tons over the same period last year, or 196.59 percent; sales of lithium hydroxide were 783.35 tons, an increase of 420.15 tons, or 115.68 percent; sales of lithium concentrate were 6370.49 tons, an increase of 6014.85 tons, or 1691.27 percent, over the same period last year; and sales of battery-grade lithium carbonate were 303.78 tons, an increase of 303.78 tons, or 100 percent. (3) inventory: the inventory of lithium products was 11298.69 tons by the end of 2021, an increase of 11.34% over the same period last year, which can be used for sales in 2022.
Mining technology has been continuously improved, and chromium products have increased steadily. (1) Price: the per ton income, cost and gross profit of chromium products in 2021 are 2123, 985,1138 yuan / ton respectively. (2) production, marketing and inventory:
The company adopted new mining technology and strengthened production management. The output of chromium ore (excluding high-carbon ferrochromium) reached record highs repeatedly. In 2021, it produced 140900 tons of chromium products, an increase of 24.20 percent over the same period last year, and sales of 148900 tons, an increase of 35.57 percent over the same period last year. By the end of 2021, the inventory of chromium products was 11300 tons, down 41.63 percent from the same period last year.
The results of mineral resources reserves are in line with expectations, and the output of lithium concentrate in 2021 is higher than expected. According to the company announcement, Zabuye Salt Lake lithium carbonate retains 1.7876 million tons of LCE, and the company continues to improve the original production line. In 2021, the company received 9016 tons of lithium concentrate, an increase of 90 percent over the same period last year, exceeding the original forecast, and is expected to carry out gradual sales in 2022.
Relying on Baowu, the space for the development of high-quality salt lake resources is expected. After the arrival of Baowu, the actual controller of the mining industry in Tibet was upgraded to the State-owned assets Supervision and Administration Commission of the State Council, and the operating condition of the company was significantly improved. At the same time, it can get strong support from Baowu capital, technology, management and other aspects. According to public investor Q & A, the company's strategic goal is to produce 5000 tons of lithium carbonate in 2022, no less than 10,000 tons in 2023, 17000 tons in 2024 and no less than 30,000 tons in 2025-26.
Production expansion projects continue to advance, equity incentives to protect the escort: 1) Zabuye first phase capacity continuous technical transformation optimization. 2) the company started the construction of a 10,000-ton battery-grade lithium carbonate project in 2021, which is expected to be completed in July 2023 and put into production in September. 3) sign a 100-ton lithium hydroxide pilot technical renovation contract with Jiuwu Hi-Tech, which is expected to be completed in the first half of 2023, and the follow-up may consider the construction of a 10,000-ton lithium hydroxide project. At the beginning of 2022, the company announced the equity incentive plan, which set clear performance evaluation targets, or fully mobilize the enthusiasm of employees to protect the promotion of capacity projects.
Investment suggestion: lithium supply and demand may be tight for a long time. We estimate that the lithium price including tax in 2022-2024 will be 10,000 yuan / ton in 45-40-40. In 2022-2024, the company is expected to achieve operating income of 21.46,25.67 and 4.494 billion yuan respectively, with net profit of 7.54,9.35 and 1.613 billion yuan, corresponding to EPS of 1.45,1.8,3.1 yuan per share respectively. At present, the stock price is 23.1,18.7,10.8 times corresponding to PE. The first rating, given the "buy-A" rating, 6-month target price of 45 yuan per share.
Risk hint: demand is lower than expected, lithium price fluctuates sharply, and project progress is not as expected.