Event: the company released its half-yearly report for 2022. 22H1 revenue 2.793 billion yuan, year-on-year + 34.28%, net profit 305 million yuan, year-on-year-14.22%, deducting non-parent net profit 328 million yuan, year-on-year-16.23%, of which 22Q2 revenue 1.22 billion yuan, year-on-year + 16.86%, month-on-month-22.46%, return-132 million yuan, year-on-year-48.57%, quarter-on-quarter-24.25%, deducted non-return net profit 101 million yuan, year-on-year-42.75% Month-on-month ratio-55.30%.
2022 the fall in Q2 copper and cobalt prices is a drag on the company's performance. The company's revenue from cobalt products in the first half of the year was 1.502 billion yuan, year-on-year + 27.08%, gross profit margin 33.63%, year-on-year + 0.79pct; revenue of electrolytic copper was 1.282 billion yuan, year-on-year + 42.87%, gross profit margin was 20.35%, year-on-year-11.8pct. 22Q2 copper and cobalt prices fell 21 per cent and 34 per cent respectively from their highs, according to LME and Changjiang Nonferrous, leading to a decline in second-quarter results and a 2.33pct drop in gross profit margin to 26.2 per cent month-on-month.
Copper and cobalt prices are expected to stop falling and pick up in the second half of the year, and the company's performance will be gradually repaired. According to the China Securities News, industry insiders have confirmed that cobalt metal will be strategically stockpiled, and cobalt storage will effectively make up for the drag on cobalt demand caused by the weakness of the consumer electronics market this year, and the new energy vehicle market will usher in a peak season in the second half of the year, and cobalt prices are expected to stop falling and rebounding. The company has a copper production capacity of 41000 tons, which has become an important source of revenue and profit. Copper prices are expected to stabilize gradually in the second half of the year as the Fed slows the pace of interest rate hikes, helping the company repair its performance.
The leading position of cobalt powder is stable, and the integrated layout will be gradually improved in the future. In the first half of the year, the company's cobalt production capacity continued to expand, the total production capacity of cobalt hydroxide increased to 10, 000 tons, and the total production capacity of cobalt powder increased to 5000 tons, which is expected to occupy more than 29% of the global cobalt powder market in the future. The first phase of the Hanrui project in Ganzhou has been trial-produced, and the second phase of the precursor project is expected to be put into production in 2023, gradually improving the integrated layout.
Investment suggestion: it is estimated that the company will achieve a net profit of 6.51 PE 8.29 / 1.036 billion yuan from 2022 to 2024, a year-on-year comparison of-1.9%, 27.4%, 25.0%, corresponding to 16.9 times of 26.9 pm, respectively. Considering that copper and cobalt prices are expected to stop falling and pick up in the second half of the year, the "overweight" rating will be maintained.
Risk hint: downstream demand is lower than expected, copper and cobalt prices fluctuate sharply