Event: Tianqi shares released its three-quarter report in 2022, with revenue of 3.248 billion yuan in the first three quarters, an increase of 17.88% over the same period last year, and a net profit of 201 million yuan (deducting 145 million yuan), an increase of 37.25% over the same period last year (13.81%).
Q3 single-quarter results have declined, nickel and cobalt prices fell to compress the profit space. Q3 realized operating income of 1.173 billion yuan in a single quarter, an increase of 6.98% over the same period last year, and realized net profit of 39.75 million yuan (after deducting 12.91 million yuan), down 42.17% from the same period last year (deducting 79.35% from the same period last year).
At the end of the third quarter, the company's gross profit margin was 17.74%, down 1.58 pct from a year earlier; net profit was 6.08%, an increase of 1.17pct. The price of nickel and cobalt fell in the third quarter, squeezing the profit margin of the company's products.
Production capacity continues to increase, and it is estimated that 100000 tons of processing capacity will be formed next year. In the technical renovation project of comprehensive utilization and expansion of waste lithium batteries invested by the company, the lithium carbonate production line has been completed in the second quarter of this year and has been put into production. The cobalt and nickel production line has been put into production in September, and the climbing period is about one month. Capacity will be released gradually. It is estimated that the target output of cobalt, manganese and nickel is 7000 gold tons and that of lithium carbonate is 3000 tons in 2022. The lithium iron phosphate battery recycling project was started in April 2022 and is expected to be completed and put into production in the early second quarter of 2023. At that time, the company's lithium battery recycling plate will form an annual treatment scale of 100000 tons of waste lithium batteries (53 yuan + 50,000 tons of lithium iron phosphate). In 2023, it is estimated that cobalt, manganese and nickel will produce 12000 gold tons, lithium carbonate 7000-7500 tons, and battery-grade iron phosphate 8000-11000 tons. The treatment scale and product scale are in the leading level of battery recycling industry.
Actively layout the echelon utilization business to consolidate the advantages in the field of lithium cycle. Tianqi New Power, a subsidiary of the company, focuses on battery recycling and echelon utilization of special-purpose vehicles, which is still in the early stage of development and has not yet formed a large scale. With the landing of the new business model and the arrival of the peak of power battery retirement, there will be large-scale application scenarios for echelon utilization in the future. In addition, the participating subsidiary Qiantai Technology (Shenzhen Shantou) focuses on the scrapping and disassembly of new energy vehicles and the echelon utilization of power batteries, which will be based on the resource advantages of Shenzhen High Speed Group. Guangdong-Hong Kong-Macau Greater Bay Area's location advantages as well as its own scale advantages and technological advantages to further develop echelon utilization business.
Gather various resources to build battery recycling channels. The company actively carries out the construction of power battery recycling system and the layout of recycling channels around six major channels, including battery manufacturers, battery applications, social resource recyclers, battery asset management service providers, automotive aftermarket service providers, Internet and e-commerce platforms. During the year, the company has established strategic partnerships with Xing Heng Power, Haitong Hengxin, Shanxi products Group, Guangzhou Huasheng, JD.com Science and Technology, Jinghe Shaanxi Coal Research Institute and other enterprises and institutions, deeply binding multi-resources with diversified cooperation modes, and jointly building a recycling ecosystem of waste lithium batteries to form a lithium battery service and recycling system with Tianqi enterprise characteristics.
Investment suggestion: it is estimated that the return net profit of the company from 2022 to 2024 is 2.62 million RMB, respectively, and the corresponding EPS is 0.690.17 plus 1.54 yuan per share, respectively, and the corresponding PE is 23x/13x/10x, maintaining the "recommended" rating.
Risk hints: the risk that the development of the new energy vehicle industry is not as expected; the risk of rising waste prices upstream; the risk that the company's lithium recycling capacity releases the risk that it is not as expected; the risk that the profitability of other businesses is not as good as expected; the risk of increased competition in the industry.