The company released its 2023 annual report: achieved revenue of 21.579 billion yuan, -29.80%; realized net profit of 7.914 billion yuan, or -49.17%; realized net profit without return to mother of 8.724 billion yuan, or -43.15% year on year; realized net cash flow from operating activities of 12.105 billion yuan, or -30.78% year on year.
The company achieved revenue of 5.789 billion yuan in 2023Q4, -19.57% year-on-year, -0.77%; realized net profit to mother of 2,314 billion yuan, -33.64% year-on-year, +360.96% month-on-month; realized net profit without return to mother of 3.119 billion yuan, -2.15% year-on-year, and +599.78% month-on-month. The company's profit increased markedly in the fourth quarter, mainly due to the impact of paying a large amount of mining concession rights in the third quarter.
Potassium chloride: In 2023, the company produced about 4.926 million tons of potassium chloride, with sales volume of about 5.6 million tons. 23Q1/Q2/Q3/Q4 potassium chloride production was 99.81/103.94/138.43/1.5042 million tons respectively, with sales volumes of 124.82/88.95/162.54/1.836,900 tons respectively. At the end of the period, 672,400 tons of potassium chloride were in stock.
Lithium carbonate: In 2023, the company produced about 361,000 tons of potassium chloride, with sales volume of about 37,600 tons. 23Q1/Q2/Q3/Q4 lithium carbonate production was about 6300/7800/11700/10300 tons respectively, with sales volumes of about 1400/13600/13300/9300 tons respectively. At the end of the period, 2,619 tons of lithium carbonate were in stock.
Stabilize potassium, expand lithium, and accelerate the development of new quality productivity in salt lakes
The company's potassium chloride production capacity is 5 million tons/year. The company will accelerate the integration of potash resource development, potash fertilizer production, downstream compound fertilizer, high-value-added potash, etc., enrich the salt lake product structure, achieve the layout of the entire industry chain, and enhance market competitiveness.
The company currently has a lithium carbonate production capacity of 30,000 tons/year. In 2023, the lithium precipitated mother liquor efficient separation project was successfully put into operation. The lithium ion recovery rate in the lithium precipitated mother liquor reached 95%, and the daily production of lithium carbonate reached 140 tons. The company plans a new basic lithium salt production capacity of 40,000 tons/year in 2022. The project is to build a new project with an annual output of 20,000 tons of battery-grade lithium carbonate+20,000 tons of lithium chloride. The construction site is within the company's Charhan Potassium-Lithium Industrial Park. The construction period is 24 months, with a total investment of about 7.082 billion yuan. The funding sources are the company's own funds and bank loans; the overall project is progressing normally according to the plan and is expected to be completed by the end of 2024.
Risk warning: The rise in potash fertilizer and lithium salt prices did not meet expectations; the progress of lithium carbonate production expansion was lower than expected.
Investment advice: Maintain a “buy” rating.
The company's 2024-2026 revenue is expected to be 184.70/187.24/196.09 (original forecast 218.87/226.83/-) billion yuan, year-on-year growth rate -14.4%/1.4%/4.7%, net profit to mother is 82.51/83.48/87.67 (original forecast 104.37/110.17/-) billion yuan, 4.3%/1.2%/5.0%; diluted EPS is 1.52/1.54/1.61 yuan, corresponding PE to the current stock price is 11 /10/10X. Relying on the unique resource advantages of Chaerhan Salt Lake, the company is in an absolute leading position in the domestic potash fertilizer and salt lake lithium extraction fields. In particular, the company's production capacity in the salt lake lithium extraction field is expected to expand rapidly in the future and is expected to maintain a strong cost advantage. It is of great significance in strengthening the autonomy and control of domestic lithium resources, and maintains a “buy” rating.