Event
The company released the third quarterly report of 2023 on October 30, realizing revenue of 5.005 billion yuan in the first three quarters, down 8.81% at the same time; realizing net profit of 2.070 billion yuan, increasing 0.92% at the same time; realizing net profit of 2.025 billion yuan deducted from non-profit, increasing 1.32% at the same time; realizing revenue of 1.404 billion yuan in 3023, down 8.23% at the same time; Realized net profit of 568 million yuan, an increase of 39.64%; realized deduction of non-net profit of 535 million yuan, an increase of 38.29% Comments
Q3 Lithium mine self-sufficiency rate increased and profitability continued to grow. Affected by the decline in demand and the removal of industrial chain, the average price of Q3 battery-grade lithium carbonate was 240,600 yuan/ton, down 4%; the average price of lithium hydroxide was 223,600 yuan/ton, down 25%. The reconstruction and expansion projects of Bikita 2 million tons/year (dioptite) and 2 million tons/year (spodumene) of Q3 Company have been put into operation, and the concentrate has been transported back to China for six times. The lithium salt self-sufficiency rate of Q3 Company has been significantly improved, and the average cost has been reduced. The gross profit rate is 59.78%, and the ring increase is 10pcts. The company's expenses are well controlled, Q3 sales expenses are reduced by 30%, R & D expenses are reduced by 19%, management expenses are reduced by 51%, 03 net interest rate is 40.39%, ring increase is 13.59pcts, profitability is significantly improved.
Bikita project officially put into trial production, lithium ore will be fully self-supplied. The company owns Bikita lithium mine in Zimbabwe and Tanco lithium mine in Canada, with a total production capacity of about 14,000 tons of LCE. Bikita and Tanco plan to build 4 million tons and 1 million tons of ore production capacity respectively. It is estimated that their own mine production capacity will be 25,000 tons and 64,000 tons of LCE respectively in 23-24 years. The company has lithium fluoride production capacity of 6000 tons/year, lithium carbonate/lithium hydroxide production capacity of 25,000 tons/year, new production capacity of 35,000 tons/year, is expected to be put into operation in 4023, follow-up overseas planning continues to 40,000 tons/year, 25 years to reach about 100,000 tons of lithium salt production capacity scale. In 24 years, the self-sufficiency rate of production expansion by Bikita is close to 100%, and the self-supply of 60,000 tons of lithium salt is completely realized.
The rubidium cesium business application market continues to expand. The company is a leader in the field of cesium rubidium salt fine chemical industry, with high-quality cesium resources, two global production bases and cesium formate recovery base. The company's cesium salt processing technology is leading, mainly including cesium carbonate, cesium sulfate, cesium nitrate, cesium hydroxide, cesium iodide and cesium formate, etc. The downstream can be used in strategic emerging industries such as aerospace, national defense military industry, information technology, etc., and the application scenarios are constantly expanding. Cesium formate is used in oil and gas exploration and is the best drilling fluid and completion fluid in the oil and gas industry.
Profit Forecast & Investment suggestion
According to the company's performance in the first three quarters, the company's net profit from 23 to 25 years will be reduced by 15%, 6% and 9%, respectively. It is estimated that the net profit from 23 to 25 years will be 3.099 billion yuan, 4.298 billion yuan and 4.848 billion yuan respectively, corresponding EPS will be 4.35 yuan, 6.03 yuan and 6.80 yuan respectively, and corresponding PE will be 8 times, 6 times and 5 times respectively.
Risk hint
Capacity expansion is less than expected; market demand is lower than expected; exchange rate fluctuation risk.