Event description
The company released the third-quarter results report, 2022Q1-3 realized operating income of 3.96 billion yuan, + 23.6% year-on-year, net profit of 254 million yuan, and net profit of 1.167 billion yuan, + 3.85%, and net profit of-51 million yuan.
Event comment
Copper and cobalt prices continue to decline, the company's profits are under pressure. Projects under construction are put into production, production and sales may achieve month-on-month growth: the company's annual output of 5000 tons of cobalt powder technical renovation project was put into production in March 2022, and the 5000 tons of cobalt hydroxide project was put into production in June 2022. The company's 2022Q3 products production and sales may achieve month-on-month growth. Metal prices continue to be under pressure: the average prices of 2022Q3 metal cobalt and SHFE copper are 342000 / ton and 60438 yuan / ton respectively, down 28% and 15% from the previous month. At the end of 2022Q3, metal cobalt and SHFE copper prices fell 8% and 4% respectively compared with the beginning of the quarter. On the one hand, volume increases and prices fall, the company's 2022Q3 revenue is-4% month-on-month; on the other hand, high-price inventory and rising energy prices of auxiliary materials make the company's operating costs increase month-on-month, with 2022Q3 operating costs of 1.171 billion yuan and + 30% month-on-month. The company's overall profitability has declined.
Focus on the full release of price risk, the company's capacity expansion and new energy layout of long-term growth. On the one hand, the company added 6000 tons of electrodeposition copper, 5000 tons of crude cobalt, 2000 tons of cobalt powder in Anhui Hanrui, and 10,000 tons of cobalt new material projects in Ganzhou from the end of last year to the first half of this year. The same amount of copper and cobalt has increased strongly in the whole year. At present, it has formed a production capacity of 10000 tons of crude cobalt hydroxide, 41000 tons of electrolytic copper, 5000 tons of cobalt powder and 10,000 tons of new cobalt materials. On the other hand, the company plans to cooperate with Huabao Industrial Park to build 60,000 tons of high-pressure acid wet smelting project, and at the same time plans to build 26000 tons of ternary precursor production capacity. and has successively set up two major industrial funds, and gradually build a "resource + battery + vehicle" industry chain cooperation model, complementary advantages hand in hand win-win. It is estimated that from 2022 to 2024, the company will achieve a net profit of 423 million, 507 million and 656 million, corresponding to PE29X, 24X and 19x.
Risk hint
1. The production of the new project is not as expected.
2. Metal prices fell more than expected.