Yongxing Materials (002756): Consolidated mining rights report layout layout of lithium carbonate complete industry chain

Yongxing Materials (002756): Consolidated mining rights report layout layout of lithium carbonate complete industry chain

The event company announced that its holding subsidiaries Yongxing New Energy, Huaqiao Yongtuo, Yichun Mining and Huaqiao Mining special issue “Agreement on Yifeng County Huaqiao Yongtuo Mining Co., Ltd.’s equity change and investment increase”.

After the equity change and increased investment, Huaqiao Mining and the porcelain stone mining rights it holds in Baishi Mining Area will be within the scope of the company’s consolidated statement.

The opinion guarantees the upstream raw materials of the lithium carbonate project and opens the last link of the industrial chain.

The forthcoming Huaqiao Mining and the porcelain mining rights held in Baishi Mining Area will be within the scope of the company’s consolidated statement. In the future, it will effectively guarantee the company’s upstream raw materials for the battery-level lithium carbonate project that has been put into trial operation.

According to the announcement, as of April 2019, the Huashan 天津夜网 porcelain stone ore body gradually identified the controlled intrinsic economic resources (332) + the triggered intrinsic economic resources (333) and the amount of ore was 4507 variables, of which 332The amount of ore is 3099 additives, and the amount of 333 types of ore is 1408 additives.

At this point, the company has completed the layout of the complete new energy lithium battery industry chain from the mining of mineral resources to the production of brine to the production of battery-grade lithium carbonate, and the cost advantage will change.

Lithium carbonate project is expected to contribute to profit, and it is estimated that there is room for improvement.

The company’s first-phase annual production of 1 entered the battery-grade lithium carbonate project has been put into production. Considering the company’s research and development technology strength and cost advantages brought by its own minerals, the project’s future profitability is expected, and it is expected to contribute profits in 2020.

Since 2017, the company has been involved in the dual main business of lithium battery, and subject to the impact of the outlook on the lithium carbonate industry, the company is expected to continue to be under pressure.

We believe that once the project achieves profitability, the suppression of estimation factors is expected to be eliminated, and the bottom of the price of lithium carbonate will be stabilized, which will contribute to the profitability elasticity in the future, and it is estimated that there is room for improvement.

The leading segments are growing steadily, with low resistance and high dividends, and the main business has an expected margin of safety.

The downstream of the company faces high-end manufacturing industries such as petrochemical, aerospace, marine, military, nuclear power, etc., with high barriers and high added value, and the second largest domestic market share in the field of stainless steel rods and wires.

At the same time, the company has excellent management, with a debt ratio of 25% and an ROE of 10%. The net profit in the five years of listing has doubled.

At the same time, the last two years have continued to have high dividends, with an average yield of 5.
.

7%.

Earnings forecast and investment recommendations The company is expected to achieve net profit attributable to the parent of 4, respectively, in 2019-2021.

3.7 billion, 5.

2.1 billion, 6.

6.9 billion yuan, corresponding to PE of 13.

4 times, 11.

3 times, 8.

8 times.

Maintain target price of 21.

9 yuan, maintain “Buy” rating.

Risks suggest that the price of lithium carbonate will continue to fall; there is a downside risk to macro demand.