Key points of investment:
The company released its 2023 annual report and 2024 quarterly report successively. In 2023, the company achieved revenue of 21.58 billion yuan, -29.8% year-on-year, net profit attributable to mother of 7.91 billion yuan, or -49.2% year-on-year, net profit after deducting non-return to mother of 8.72 billion yuan, or -43.2% year-on-year. 24Q1 achieved operating income of 2.72 billion yuan, or -52.9% month-on-month; net profit to mother was 934 million yuan, or -59.6% month-on-month; net profit without return to mother was 850 million yuan, -72.8% month-on-month.
2024Q1: Volume and price reductions in the first quarter slightly affected the company's performance. 1) Volume: The 24Q1 company achieved 1.124 million tons of potassium chloride production, +12.6% year over year, -25.3% month on month, sales volume 764,000 tons, -38.8% year on year, and -58.4% month on month, mainly due to an increase in imported potash fertilizer. Achieved 90,000 tons of lithium carbonate production, +38.1% year over year, -14.7% month on month, sales volume of 10,000 tons, +607.1% year on year, and +6.5% month on month. 2) Price: 24Q1 The company's sales revenue per ton of potassium chloride was about 2,138 yuan/ton without tax, and the sales revenue of a single ton of lithium carbonate was about 83,000 yuan/ton without tax, all of which declined sharply from the previous year.
2023: Increased revenue costs due to the payment of 1,897 billion mining rights. 1) Volume: In 2023, the company's potassium chloride production was 4.926 million tons, -15.1% YoY, sales 5.6 million tons, +13.3% YoY, inventory 672,000 tons, YoY -57.6%; lithium carbonate production was 36,000 tons, +16.3% YoY, sales 38,000 tons, +24.6% YoY, and inventory was 2,619 tons, or -37.0% YoY. 2) Price: The average sales price of the company's potassium chloride in '23 was 2,895 yuan/ton, -25.4% year-on-year, and the average sales price of lithium carbonate was 1.910,000 yuan/ton, or -55.5% year-on-year. 3) Profit: The annual sales cost of potassium chloride was 1,271 yuan/ton, +76.5% year-on-year, and the sales cost of lithium carbonate was 47,000 yuan, +52.6% over the same period. The main reason for the cost increase was that the company's two major businesses paid 1.53 billion yuan and 370 million yuan respectively, totaling 1,897 billion yuan in mining rights concession revenue. This fee is a one-time fee, and only a certain amount of resource tax will be paid according to revenue, so future costs will return to normal levels.
Promote the implementation of the “Double Improvement of Quality and Return” action plan. Anchoring “stabilizing potassium” and enriching the salt lake product structure; focusing on “expanding lithium”, with an estimated investment of 7.098 billion yuan for the 40,000 tons/year lithium salt project, which is expected to be put into operation by the end of 2024. The “1+2+3+4” 100,000 ton lithium salt production capacity plan is progressing steadily; focus on “breaking through magnesium” to accelerate breakthroughs in process technology research and promote the magnesium industry as the next industry; focus on “developing sodium” to accelerate the construction of 5 million tons/year industrial salt projects to improve resource utilization efficiency; focus on “developing scattered elements” and promote boron mining and mining Co-associated minerals such as bromine ore, rubidium ore, iodine ore comprehensive use.
Profit forecast and investment advice: We revised price, sales and cost assumptions, and estimated the company's net profit to mother in 24-26 was 67.43/79.68/8.485 billion yuan (the value was 80.91/8.70 billion yuan 24-25 years ago). 2024 corresponds to PE 14.5 times, maintaining a “buy” rating.
Risk warning
Product prices fall short of expectations, environmental risks, and projects under construction fall short of expectations