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 年第一季度的業績未達到我們的預期
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.
華友鈷業公佈了其2023年業績：收入同比增長5.2％，至663億元人民幣，歸屬於股東的淨利潤同比下降14.3％，至人民幣33.5億元。在23年第四季度，收入同比增長6.2％，但環比下降14.3％，至152億元人民幣，歸屬於股東的淨利潤同比下降62.6％，環比下降63.6％，至人民幣3.38億元。該公司公佈了其24年第一季度業績：收入同比下降21.7％，環比下降1.6％，至人民幣150億元，歸屬於股東的淨利潤同比下降49％，環比增長54.7％，至人民幣5.22億元。由於金屬和鋰離子材料價格下跌，該公司2023年和24年第一季度的業績未達到我們的預期。
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年主要產品的產量和銷售量的顯著增長部分抵消了價格下跌的影響。2023年，該公司的鎳、鋰和三元前體產量同比增長了83％、141％和21％。這些產品的銷量也同比增長了88％、104％和31％。儘管價格下跌，但這些主要產品的產量和銷量的急劇增長在一定程度上抵消了影響。根據iFinD和亞洲金屬的數據，2023年鈷、鎳、碳酸鋰、三元前體和正極材料的國內ASP同比下降了39％、13％、48％、22％和34％。結果，由於價格下跌，該公司的總體通用汽車同比下降了4.5個百分點。
Trends to watch
值得關注的趨勢
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年第一季度記錄了少量資產減值的回扣，這表明減值壓力有所緩解。截至24年第一季度末，國內金屬鈷價格和海外甲基溴鈷價格與年初相比下降了1.6％和2.2％，這表明鈷價格下降放緩。根據公告，該公司在24年第一季度扭轉了1300萬元人民幣的資產減值，環比增加了3.46億元人民幣。最近，世界上最大的鈷生產國剛果民主共和國（DRC）就提高這種電池金屬價格的措施向國際行業組織徵求了建議。我們認爲，剛果民主共和國的行動將對鈷供應產生重大影響，支撐鈷的價格。因此，該公司的減值風險有望逐漸緩解。
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.
該公司一直在優化其產業結構並加強其競爭優勢。預計鎳礦業務將繼續增長。根據公告，爲應對下游鋰電池產品和技術的升級，以及鋰電池產業鏈市場環境的變化，公司調整了年產5萬噸三元正極材料項目和10萬噸/年三元前驅體整合項目的時間表。這些調整是根據其生產能力和該行業的發展週期做出的。
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，該公司計劃實施一項以全面規劃、技術支持、降低成本和提高效率爲重點的業務戰略。目標是擴大其在現有訂單中的份額，從增量訂單中抓住機會，並通過領先的產品和成本效益措施繼續建立競爭優勢，進一步鞏固其行業領先地位。鑑於華飛的12萬噸鎳金屬溼法冶金項目到24年第一季度末已接近其設計產能，我們估計該公司在鎳產品中的股份將在2024年同比增長46％。
Financials and valuation
財務和估值
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.
我們下調了對公司主要產品價格和產出的假設，並將2024年和2025年的收益預測下調了50.7％和54.7％，至26億元人民幣和29億元人民幣。該股的市盈率爲2024年的18.1倍和2025年的16.1倍。考慮到收益調整和有色金屬板塊的上升趨勢，我們將目標31.6％下調至32.55元人民幣，這意味着2024年的市盈率爲21倍，2025年市盈率爲19倍，上漲幅爲17.7％。鑑於公司在綜合成本優勢和良好的增長前景的推動下實現了反週期擴張，我們維持跑贏大盤的評級。
Risks
風險
Sharper-than-expected decline in metal prices; disappointing progress of projects; disappointing AFV sales.
金屬價格跌幅大於預期；項目進展令人失望；AFV銷售令人失望。
譯文內容由第三人軟體翻譯。