Tianqi Lithium (002466) Annual Report Comments: The performance growth is good, and it is expected to benefit from industry clearing

Tianqi Lithium (002466) Annual Report Comments: The performance growth is good, and it is expected to benefit from industry clearing

The company’s performance grew steadily in 2018, and net profit attributable to mothers reached 2.2 billion (YOY + 2).

57%) The company released its 2018 annual report: operating income in 2018 was 62.

4.4 billion (+14 compared to the same period last year).

16%), net profit attributable to mother 22.

0 million yuan (+2 year-on-year.

57%), after deducting non-return net profit 18.

810,000 yuan (YOY-12.

twenty three%).

Among them, the company holds approximately SQM’s total share capital2.

When 1% of Class B shares were 杭州夜生活网 transferred to long-term equity investments in 2018, the incremental fair value gains and losses originally included in other comprehensive income were transferred to investment gains, which increased the amount of non-recurring gains and losses; of which, the fourth quarterRevenue 14.

8.6 billion (YOY-1.

60%), net profit attributable to mother 5.

110,000 yuan (YOY-18.

45%).

The company expects to achieve net profit attributable to mothers in Q1 20191.

00-1.

80 ppm, a 72-year average of 72.

74% -84.

85%, the first is the decrease in lithium chemical products and mergers and acquisitions led to increased spending.

As a leading company in the lithium industry, the company will benefit from new energy development dividends for a long time.

Considering the increase in depreciation brought by the construction in progress and the issuance of Hong Kong stocks may be less than expected, we expect the company’s net profit attributable to the parent to be 17-20 in 2019-2021.

00 (-3.

12) / 26.

69 (-4.

94) / 39.

65 ppm, corresponding to EPS of 1.

49/2.

34/3.

47 yuan, maintaining the “highly recommended” level.

The SQM acquisition was completed in 2018, and the company’s resource moat continued to consolidate. According to the company’s announcement, the company’s total assets at the end of 2018 were 446.

340,000 yuan, an increase of 150 from the beginning of 2018.

19%, the first is that the company completed 23 of the SQM.

77% equity purchases led to an increase in long-term equity investments and expansion projects to increase production capacity led to an increase in construction in progress.

From the perspective of tungsten halide distribution, SQM has the largest brine storage and highest grade in the world, and the company’s lithium resource advantage continues to strengthen.

Lithium prices have entered the bottom shock zone, and leading companies will benefit from the capacity clearance process. According to CIAPS data, the overall lithium carbonate market is weak and stable, with battery grade 7.

8-8.

30,000 / ton, industrial grade 6.

7-7.20,000 / ton.

In terms of lithium hydroxide, it is expected that new investment will continue to increase in the future. The price is under pressure and the current battery level is reported at 9.

3-9.

80,000 / ton.

In terms of capacity, the company’s lithium concentrate CGP2 plant will begin production in mid-2019, and will be able to increase the annual output of chemical-grade lithium concentrate at the Green Bush Mine by 65 tons.The trial production increased the annual output of the Green Bush mine to approximately 195 inches.

In terms of lithium compounds, the company built a total of 4 in two phases.

8 Lithium hydroxide formaldehyde production capacity, Phase I 2.

4 The final production capacity has been commissioned at the end of 2018. At the same time, the company will build a 2 battery-level lithium carbonate production capacity in Suining.

Risk warning: production capacity advances less than expected; lithium price continues to be subdivided; M & A loan debt repayment risk.