HUAYOU COBALT(603799):IMPAIRMENT PRESSURE TO EASE; NICKEL BUSINESS TO SEE CONTINUED RAMP-UP
HUAYOU COBALT(603799):IMPAIRMENT PRESSURE TO EASE; NICKEL BUSINESS TO SEE CONTINUED RAMP-UP
2023 and 1Q24 results miss our expectations
2023 年和 24 年第一季度的业绩未达到我们的预期
Huayou Cobalt announced its 2023 results: Revenue rose 5.2% YoY to Rmb66.3bn, and net profit attributable to shareholders fell 14.3% YoY to Rmb3.35bn. In 4Q23, revenue rose 6.2% YoY but fell14.3% QoQ to Rmb15.2bn, and net profit attributable to shareholders fell 62.6% YoY and 63.6% QoQ to Rmb338mn. The firm announced its 1Q24 results: Revenue fell 21.7% YoY and 1.6% QoQ to Rmb15bn, and net profit attributable to shareholders fell 49% YoY and rose 54.7% QoQ to Rmb522mn. The firm's 2023 and 1Q24 results missed our expectations due to falling prices of metal and LiB materials.
华友钴业公布了其2023年业绩：收入同比增长5.2％，至663亿元人民币，归属于股东的净利润同比下降14.3％，至人民币33.5亿元。在23年第四季度，收入同比增长6.2％，但环比下降14.3％，至152亿元人民币，归属于股东的净利润同比下降62.6％，环比下降63.6％，至人民币3.38亿元。该公司公布了其24年第一季度业绩：收入同比下降21.7％，环比下降1.6％，至人民币150亿元，归属于股东的净利润同比下降49％，环比增长54.7％，至人民币5.22亿元。由于金属和锂离子材料价格下跌，该公司2023年和24年第一季度的业绩未达到我们的预期。
Notable growth in output and sales volume of major products in 2023 partly offset the impact of falling prices. In 2023, the firm's output of nickel, lithium, and ternary precursors increased by 83%, 141%, and 21% YoY. Sales volumes for these products also rose by 88%, 104%, and 31% YoY. Despite falling prices, the sharp increases in output and sales volumes of these major products partly offset the impact. According to iFinD and Asian Metal, the domestic ASP of cobalt, nickel, lithium carbonate, ternary precursors, and cathode materials decreased by 39%, 13%, 48%, 22%, and 34% YoY in 2023. As a result, the firm's overall GM declined by 4.5ppt YoY due to falling prices.
2023年主要产品的产量和销售量的显著增长部分抵消了价格下跌的影响。2023年，该公司的镍、锂和三元前体产量同比增长了83％、141％和21％。这些产品的销量也同比增长了88％、104％和31％。尽管价格下跌，但这些主要产品的产量和销量的急剧增长在一定程度上抵消了影响。根据iFinD和亚洲金属的数据，2023年钴、镍、碳酸锂、三元前体和正极材料的国内ASP同比下降了39％、13％、48％、22％和34％。结果，由于价格下跌，该公司的总体通用汽车同比下降了4.5个百分点。
Trends to watch
值得关注的趋势
A small write-back of asset impairment was recorded in 1Q24, indicating easing impairment pressure. As of the end of 1Q24, domestic metal cobalt prices and overseas MB cobalt prices had fallen by 1.6% and 2.2%, compared to the beginning of the year, indicating a slowing decline in cobalt prices. According to the announcement, the firm reversed Rmb13mn of asset impairment in 1Q24, an increase of Rmb346mn QoQ. Recently, the Democratic Republic of the Congo (DRC), the world's largest cobalt producer, has sought advice from international industry organizations on measures to increase the price of this battery metal. We believe that the DRC's actions will have a significant impact on cobalt supply, supporting cobalt prices. As a result, the firm's impairment risk is expected to gradually ease.
24年第一季度记录了少量资产减值的回扣，这表明减值压力有所缓解。截至24年第一季度末，国内金属钴价格和海外甲基溴钴价格与年初相比下降了1.6％和2.2％，这表明钴价格下降放缓。根据公告，该公司在24年第一季度扭转了1300万元人民币的资产减值，环比增加了3.46亿元人民币。最近，世界上最大的钴生产国刚果民主共和国（DRC）就提高这种电池金属价格的措施向国际行业组织征求了建议。我们认为，刚果民主共和国的行动将对钴供应产生重大影响，支撑钴的价格。因此，该公司的减值风险有望逐渐缓解。
The firm has been optimizing its industrial structure and strengthening its competitive advantages. The nickel business is expected to continue ramping up. According to the announcement, in response to upgrades in downstream lithium battery products and technologies, as well as changes in the lithium battery industry chain's market environment, the company has adjusted the timelines for its 50,000t/yr ternary cathode material project and 100,000t/yr ternary precursor integration project. These adjustments were made based on its production capacity and the industry's development cycle.
该公司一直在优化其产业结构并加强其竞争优势。预计镍矿业务将继续增长。根据公告，为应对下游锂电池产品和技术的升级，以及锂电池产业链市场环境的变化，公司调整了年产5万吨三元正极材料项目和10万吨/年三元前驱体整合项目的时间表。这些调整是根据其生产能力和该行业的发展周期做出的。
In 2024, the company plans to implement a business strategy focused on comprehensive planning, technological support, cost reduction, and efficiency enhancement. The aim is to expand its share of existing orders, seize opportunities from incremental orders, and continue building competitive advantages through leading products and cost-efficiency measures to further strengthen its industry-leading position. Given that Huafei's 120,000t hydrometallurgy project for nickel metal reached close to its designed capacity by the end of 1Q24, we estimate that the firm's stake in nickel products will grow by 46% YoY in 2024.
2024年，该公司计划实施一项以全面规划、技术支持、降低成本和提高效率为重点的业务战略。目标是扩大其在现有订单中的份额，从增量订单中抓住机会，并通过领先的产品和成本效益措施继续建立竞争优势，进一步巩固其行业领先地位。鉴于华飞的12万吨镍金属湿法冶金项目到24年第一季度末已接近其设计产能，我们估计该公司在镍产品中的股份将在2024年同比增长46％。
Financials and valuation
财务和估值
We lower our assumptions for prices and output of the firm's main products, and lower our 2024 and 2025 earnings forecasts 50.7% and 54.7% to Rmb2.6bn and Rmb2.9bn. The stock is trading at 18.1x 2024e and 16.1x 2025e P/E. Considering earnings revisions and the uptrend in the nonferrous metal sector, we cut our TP 31.6% to Rmb32.55, implying 21x 2024e and 19x 2025e P/E and offering 17.7% upside. Given the company's counter-cyclical expansion driven by integrated cost advantages and promising growth prospects, we maintain an OUTPERFORM rating.
我们下调了对公司主要产品价格和产出的假设，并将2024年和2025年的收益预测下调了50.7％和54.7％，至26亿元人民币和29亿元人民币。该股的市盈率为2024年的18.1倍和2025年的16.1倍。考虑到收益调整和有色金属板块的上升趋势，我们将目标31.6％下调至32.55元人民币，这意味着2024年的市盈率为21倍，2025年市盈率为19倍，上涨幅为17.7％。鉴于公司在综合成本优势和良好的增长前景的推动下实现了反周期扩张，我们维持跑赢大盘的评级。
Risks
风险
Sharper-than-expected decline in metal prices; disappointing progress of projects; disappointing AFV sales.
金属价格跌幅大于预期；项目进展令人失望；AFV销售令人失望。
译文内容由第三方软件翻译。