Company events
The company released its 2022 semi-annual report. 2022H1 achieved operating income of 1,221 million yuan, +439.2% year on year; net profit of 475 million yuan, +1018.3% year on year; net profit returned to the mother after deduction of 470 million yuan, +991.6% year on year. Looking at a single quarter, 2022Q2 achieved revenue of 868 million yuan, +861.39% year on year, +146.01% year on month; net profit of the mother was 343 million yuan, 1430.94% year on year, +160.05% month on month; net profit of the non-return mother was 344 million yuan, +1413.55% year on year, +173.04% month on month.
The volume and price of the main products were in unison, and the company's performance increased significantly
During the reporting period, the increase in the company's operating performance was clearly mainly due to the sharp rise in lithium concentrate and chrome ore prices and the company's increased sales efforts. 22H1 lithium products/chrome products achieved revenue of 1,06/160 million yuan respectively, +961.6%/25.2%, respectively, and accounted for 86.8%/13.1% of revenue respectively. Lithium products contributed greatly to the performance of lithium products. Looking at each product, 1) The volume and price of lithium products have increased, and the profitability has clearly increased. Volume: 22H1 sold 6840.60 tons of lithium concentrate and 198.27 tons of industrial grade lithium salt. Looking at a single quarter, 22Q1/22Q2 sold 2113/4727 tons of lithium concentrate, and plans to complete the production of 9500 tons of lithium concentrate throughout the year; Price: Benefiting from the high level of boom in the industry, lithium salt prices increased dramatically. According to data from the Ministry of Industry and Information Technology, the average price of battery-grade lithium carbonate in the first half of 2022 was 454 thousand yuan/ton, up 454% from the previous year; profit: 22H1 lithium products had a gross margin of 94.47%, a year-on-year increase of 53.5pct. 2) Due to the sharp increase in chrome ore production and lower operating costs, the profitability of chromium products has increased dramatically. 22H1 chromium products achieved sales of about 64,000 tons; operating costs were 43 million yuan, -52% year on year; gross profit margin was 71.99%, +45.02 pct year on year.
Expanding the chrome mining business and accelerating the development process of a world-class salt lake. In terms of chromium business, the company plans to increase production through exploration, reconstruction and integration, expand production by 150,000 tons in 2022, and reach 200,000 tons/year of chrome ore by 2023, and create a “China Chrome Capital” industry card, with the goal of becoming a clean energy steel exemplary enterprise. In terms of lithium business, the company seizes opportunities in the new energy market and actively promotes the salt lake development process: ① The first phase of the Zabouye optimization project plans to expand production to 10,000 tons of lithium concentrate, and plans to produce 9,500 tons of lithium concentrate this year; ② Restart the construction of the Zabouye Phase II 12,000-ton lithium carbonate production line (9,600 tons of electric carbon +2,400 tons of industrial carbon) project. Construction of the second phase of the Zabyeh Phase 12,000-ton lithium carbonate production line (9,600 tons of electric carbon +2,400 tons of industrial carbon) project started according to the plan and is expected to be put into operation in September 2023; ③ Signing a contract with Jiuwu Hi-Tech for pilot technical improvement of the 100-ton lithium hydroxide pilot technology, currently verifying the different process routes. After the test is successful, it will be promoted Construction of a 10,000-ton lithium hydroxide project. In addition, in the five-year plan, the company established five investment plans totaling 785 million yuan and a fixed asset investment scale of 6.151 billion yuan to provide financial guarantees for resource development and industrial chain layout.
Investment advice
We expect the company to achieve revenue of 26.4/31.6/4.54 billion yuan respectively in 2022-2024, up 310.3%/19.5%/43.8%, respectively; the net profit of the mother was 10.9/129/1.88 billion yuan respectively, up 676.9%/18.2%/46.4%, respectively; the current stock price corresponding to PE is 25X/21X/14X respectively, maintaining the company's “buy” rating.
Risk warning
Risk of price fluctuations for main products such as lithium salt and chromite, the progress of the company's ongoing projects falling short of expectations, market demand falling short of expectations, etc.