Ganfeng Lithium (002460): Consolidate the foundation of the lithium power industry chain and strengthen the integration of upstream and downstream resources

Ganfeng Lithium (002460): Consolidate the foundation of the lithium power industry chain and strengthen the integration of upstream and downstream resources
First, the event overview Ganfeng Lithium Industry released the semi-annual report for 2019 on the evening of August 28.Report the core company’s operating income28.22 ppm, an increase of 21 in ten years.04%; net profit attributable to mother 2.96 trillion, down 59 a year.twenty three%. Second, analyze and judge that the company’s main business is advancing steadily.The business structure reported to the lithium battery deepening step by step, and the company’s main business progressed steadily.The operating income grew rapidly, and the proportion of lithium battery business increased slightly. Among them, lithium products continued to grow (up 16).32%), lithium battery series products have greatly improved (up 78.19%), other products business rose steadily (up 23).72%); the proportion of lithium battery revenue increased slightly 3.03 single to 9.45%, lithium series products fell slightly 3.25 up to 80.21%. Other products and businesses remained stable.Due to the increase in sales of lithium ore salt products, the average price decreased by 47 compared to 2018H1.01%, the operating cost of lithium series products rose 61.81%, gross margin level dropped by 18.93%.Overall, the decline in lithium’s prosperity and high base period effect led to a decline in return to motherhood. Sales expenses dragged down performance, and outbound mergers and acquisitions strengthened scale advantages. According to the semi-annual report, the expense end continued to increase.40%, mainly due to the increase in selling expenses and management expenses, of which sales increased to lead to increased transportation costs, stimulating the increase in selling expenses 62.34%; administrative expenses increased by 20.55% is 1 due to expected expansion stocks.34 billion in costs, not consistently. Net operating cash flow rose 688 due to the rise in sales of goods.74%; the increase in corporate financing and borrowings boosted the net cash flow of fundraising funds by 459.55%; net investment cash flow decreased by 175 due to increased investment payments.30%. Non-mainstream influence is limited, RIM contributes 1.3.0 billion, accounting for 26.86%; Pilbara continues to decrease leading to loss of fair value1.1.9 billion, accounting for 30.86%.At the same time, the company plans to issue convertible bonds to raise no more than 21.50 ppm, subscribe for Minera Exar equity, enhance scale advantages, and reduce raw material costs. Consolidate the foundation of the lithium power industry chain and strengthen upstream and downstream resource integration companiesThe layout of lithium resources consolidates the guarantee for the supply of high-quality lithium. The company continues to increase its holdings of high-quality lithium ore resources in Australia (Rim and Pilbara), increases the shareholding ratio of the halogen company Minera Exar, and lays out lithium clay resources in Mexico.Lithium processing capacity was gradually released, and Xinyu 2 replaced lithium hydroxide and Ningdu 1.75 micro battery grade lithium carbonate will meet the standard in 2019; the remaining 5 inches of battery grade lithium carbonate will be put into production in 2020.The solid-state lithium battery will enter the 四川成都耍耍论坛 commercialization progress. In 2019, H2 will be put into production with an annual output of 100 million watt-hours of first-generation solid-state lithium batteries.At the same time, the second phase of the Ganfeng cycle started, and it is expected that the disposal capacity of the used lithium battery will reach 10 inches after it is completed and put into operation. Third, the investment proposal considers that the company’s production capacity is gradually released, the price of related metals is limited downward, and the advantages of the entire industrial chain layout gradually appear. It is expected that the company’s EPS for 2019-2021 will be 0.95/1.07/1.19 yuan, corresponding to the current sustainable PE is 22/20 / 18X.At present, the company estimates that the value of the distribution points is lower than 33% since 2010, and only has a certain safety margin, giving a “recommended” rating. Fourth, risk warning: lithium prices fell more than expected, downstream demand exceeded expectations