Event: the company released its three-quarter report in 2022, with revenue of 1.845 billion yuan in the first three quarters, an increase of 26.79% over the same period last year, and a net profit of 220 million yuan, an increase of 61.42% over the same period last year. Q3 achieved revenue of 640 million yuan in a single quarter, up 4.80% from the previous quarter, and its net profit was 26 million yuan, down 76.09% from the previous quarter.
The company announced a non-public offering of A shares in 2022, which intends to raise no more than 580 million yuan for the acquisition of 75% equity in Red Butterfly New Materials, the construction of a 50, 000-ton / year high-purity manganese sulfate project for power batteries and supplementary liquidity.
The volume and price of 22Q3's main products declined, and the high purchase price of raw materials led to profit pressure. 1) the market of barium-strontium products is weak, quantity, price and pressure: 22Q3 domestic barium market and strontium market are weak, resulting in the sales of barium carbonate, barium sulfate, high-purity barium carbonate and high-purity barium chloride are-13.4%,-7.5%,-32.9% and-41.7%, respectively, and the prices are-6.4%,-6.3%, + 4.2% and + 4.2%, respectively. The sales volume of strontium carbonate, the main strontium salt product, is-29.0%, and the price is-32.8%. 2) Manganese production capacity overhaul alleviates inventory pressure, and shipments of high-purity manganese sulfate have been repaired: some production lines of electrolytic manganese dioxide were overhauled in July 2022. Q3 electrolytic manganese dioxide output was-64% month-on-month and sales volume was-2.7%. The supply and demand of high-purity manganese sulfate market has been weakening since Q2, and the price of Q3 is-21.1%, but the sales volume is + 81.7%. 3) the price of raw materials is high, and the cost end squeezes the company's profits: the prices of barite, coal and manganese ore, the main raw materials of 22Q3 Company, are still high, among which the average price of purchasing barite from parent company / subsidiary Dalong Manganese Industry has increased by 8.5% and 10.0% respectively compared with the previous month.
The demand for manganese in battery materials may burst, and the company will seize the opportunity to actively expand production. 1) the application of manganese in the battery field may usher in the rapid growth, and manganese series raw materials such as electrolytic manganese dioxide and high purity manganese sulfate are expected to fully enjoy the high boom: ternary lithium battery has mature technical route and excellent performance, or continues high growth with high demand for electric vehicles; lithium manganate battery is expected to increase its permeability in small power, power tools and other fields; lithium ferromanganese phosphate battery is on the eve of industrialization Most of the existing technical routes of sodium ion batteries use manganese-containing cathode materials. 2) the production capacity of battery manganese materials of the company is expected to expand rapidly: the company currently has a production capacity of 30,000 tons of electrolytic manganese dioxide and 30,000 tons of high-purity manganese sulfate per year, and plans to invest 200 million yuan to raise funds to expand the production of 50,000 tons of high-purity manganese sulfate for power batteries. The construction period is 12 months, and the production capacity of high-purity manganese sulfate will be expanded to 80,000 tons / year after the completion of the project.
Profit forecast and investment advice: considering that the company's manganese production capacity in the battery sector is expected to expand rapidly, the company's 2024 net profit is expected to be 2.76 million 3.56 trillion yuan in 2024, corresponding to 14.75 12.34 times of PE, respectively, giving the "overweight" rating for the first time.
Risk tips: downstream demand is lower than expected, product price fluctuations, product sales are not as expected