钾业务：钾肥Q2 销量大幅改善。1）量：24H1 公司实现氯化钾产量52.3 万吨，同比下降1.47%；销量54.0 万吨，同比下降8.41%，产销量分别完成全年目标的52.3%和51.8%。其中，Q2 产量36.4 万吨，环比+129.6%，销量40.1 万吨，环比+186.9%。2）价：24H1 氯化钾平均售价2,265.4 元/吨，同比下降26.5%，主因系上半年氯化钾港口库存偏高位氯化钾价格承压。3）利：上半年平均销售成本1,075 元/吨，同比上升6.3%。Key points of investment:
Event: The company released its 2024 semi-annual report. In the first half of 2024, the company achieved operating income of 1.76 billion yuan, net profit to mother of 1.3 billion yuan, a net profit of 1.3 billion yuan, a year-on-year ratio of -36.0%, and a net profit of 1.28 billion yuan after deducting net income to mother, or -36.1% year-on-year. Among them, 24Q2 achieved operating income of 1.15 billion yuan, +86.8% month-on-month, net profit of 0.77 billion yuan, +45.1% month-on-month, net profit of 0.7 billion yuan after deduction, and +21.1% month-on-month. 24H1 plans to pay a cash dividend of 2.6 yuan (tax included) for every 10 shares, and plans to invest 0.15-0.3 billion yuan to buy back the shares and cancel them.
Lithium business: Production under the new process exceeds expectations. 1) Volume: 24H1 achieved 5,809 tons of lithium carbonate production, 28.9% year over year; sales volume 7630 tons, +56.8% year over year. The main reason for the high sales volume was large sales inventory. Among them, Q2 output was 3,423 tons, +43.5% month-on-month. Process improvements such as continuous adsorption increased the company's production, and sales volume was 3,660 tons, or -7.8% month-on-month. 2) Price: The average price of 24H1 lithium carbonate was 0.094 million/ton, down 63.9% year on year. Although lithium prices rebounded after a year, they gradually declined in Q2. 3) Profit: The sales cost per ton of H1 is about 0.0413 million yuan, and the main reason for the increase is the increase in the price of old halogen.
Potassium business: Potash fertilizer Q2 sales improved significantly. 1) Volume: 24H1 achieved potassium chloride production of 0.523 million tons, a year-on-year decrease of 1.47%; sales volume of 0.54 million tons, a year-on-year decrease of 8.41%, and production and sales reached 52.3% and 51.8% of the annual targets, respectively. Among them, Q2 produced 0.364 million tons, +129.6% month-on-month, and sold 0.401 million tons, or +186.9% month-on-month. 2) Price: The average price of 24H1 potassium chloride was 2,265.4 yuan/ton, a year-on-year decrease of 26.5%. The main reason was the high level of potassium chloride port stocks in the first half of the year, and the price of potassium chloride was under pressure. 3) Profit: The average sales cost in the first half of the year was 1,075 yuan/ton, up 6.3% year on year.
Dragon Copper: Continued to contribute rich investment returns. 24H1 Julong Copper produced 0.081 million tons of copper, of which Q2 produced 0.039 million tons of copper, -7.1% of the previous month. The company holds 30.78% of Julong Copper's shares. During the reporting period, the company obtained investment income of 0.855 billion yuan, an increase of 46.1% over the previous year, accounting for 65.94% of the company's net profit to mother, and received 0.203 billion yuan in compensation for the second phase of Julong Copper's equity transfer.
The expansion of production in the three lithium-potassium-copper businesses is progressing in an orderly manner. 1) Lithium: New mining licenses for other salt lakes in Tibet have already been issued, and it is expected that the processing of Mameicuo mining licenses will be accelerated. In conclusion, the acquisition of Chaka and Guoneng Mining, a company belonging to Longmucuo Salt Lake, is subject to payment of the third installment. 2) Potassium: The Ministry of Energy and Mines of Laos has reviewed and approved the Pakistan-Russia exploration report, and will recommend research possibilities and EIA in the future. 3) Copper: Dragon Phase II is expected to achieve trial production of 0.2 million tons in the first quarter of 2026. At that time, the annual mineral copper production will increase from 0.154 million tons in 2023 to 0.3-0.35 million tons.
Profit forecast and investment advice: Taking into account recent fluctuations in the lithium and potash fertilizer market and the problem of false mining processing in Mami, we have adjusted some assumptions of the lithium and potash business. The company's net profit to mother is estimated to be 2.348/2.488/3.762 billion yuan in 2024-2026 (previously 2.527/2.996/4.451 billion yuan).
Maintaining a “buy” rating given the company's significant cost advantage and steady growth in the copper business.
Risk warning
Product prices fall short of expectations, environmental risks, and planned projects fall short of expectations.