Event
On October 30, the company announced that its operating income in the first three quarters was 9.939 billion yuan, an increase of 329.27% over the same period last year, and its net profit was 708 million yuan, an increase of 264.62% over the same period last year.
Analysis.
In the third quarter, the company achieved operating income of 3.928 billion yuan, an increase of 277.91% over the same period last year, and a net profit of 350 million yuan, an increase of 511.67% over the same period last year. Overall, the profit level of the company's products in the third quarter increased from a month earlier, with a gross profit margin of 19.39% in a single quarter. It increased by about 4 points compared with the previous quarter. Overall, the company's sales volume declined slightly compared with the previous quarter, but the price increased, and the third quarter was compensated by price. The company's automotive urea and lithium iron phosphate achieved sales of 8.02 and 25700 tons, with a month-on-month change of-13% and + 17%.
The new production capacity of lithium iron phosphate will be gradually increased, and the profitability of products will be maintained at a good level. Affected by the epidemic to a certain extent, the production capacity of Sichuan and Shandong bases has been slightly delayed, and it is expected that the production and sales of lithium iron phosphate will increase significantly in the fourth quarter. The price of lithium carbonate of raw materials increased significantly in the third quarter, and the company is expected to benefit from the increase in the inventory value of raw materials, which will lead to an increase in the profitability of products. At the same time, the company continues to improve the layout of its own industrial chain, increase the self-preparation rate of upstream iron phosphate through joint ventures or self-construction, on the other hand, participate in the layout of lithium carbonate to ensure the supply of raw materials, and at the same time obtain some raw material processing profits to achieve cost savings.
The pressure on the cost of urea for vehicles has been greatly alleviated, and the return of product profits is obvious. In the third quarter, the company sold 80,000 tons of automotive urea, 13% lower than the previous quarter, and the influencing factors of the epidemic still exist. at the same time, due to the great inhibition of the sales of six vehicles in the terminal country, the demand increment brought by the sixth country is obviously low. as a result, the sales of automotive urea in the third quarter are still under pressure. However, the third quarter is the off-season demand for industrial urea in China, the product demand is insufficient, and the price has declined obviously. according to Longzhong Chemical data, the average price of urea in Jiangsu in the third quarter is about 650 yuan / ton lower than that in the second quarter. however, the sales price of automotive urea in the third quarter increased by more than 400 yuan compared with the previous quarter, which led to a significant increase in the profit of automotive urea.
Investment suggestion
The company grasps the demand trend of lithium iron phosphate and speeds up production capacity construction. with the increase in production capacity, the company is expected to enter the fast track of development, raising its profit forecast for 2022 by 8%. It is predicted that the company's net profit for 2022-2024 will be 901 million yuan, 938 million yuan and 1.036 billion yuan respectively, corresponding to 16.53,15.89,14.38 times of PE.
Risk hint
The process of building new production capacity is not up to expectations, and intensified competition in the industry has led to the reduction of risks in industrial profits.