Tianqi Lithium (002466) 2018 Annual Report Comments: Financial Costs Devour Profit Growth as Core Value

Tianqi Lithium (002466) 2018 Annual Report Comments: Financial Costs Devour Profit Growth as Core Value

On March 28, the company released its 2018 annual report, and the combined company realized operating income of 62.

44 ppm, an increase of 31 in ten years.

79%; net profit attributable to 22 trillion, long-term growth 2.


In the fourth quarter of 2018, the company achieved operating income14.

8.6 billion, an increase of 1 from the previous month.

16%; Attributable net profit 5.

1.1 billion, an increase of 34.


It is expected that the net profit attributable to shareholders of listed companies from January to March 2019 will be 1.

800 million, an annual decline of 84.

85% -72.


Comment: Net investment income in the fourth quarter led to increased profits.

Main business: In the fourth quarter of 2018, the company realized gross profit8.

84 trillion, molecular weight 0 ring.

6.6 billion.

The price of gold in the fourth quarter dropped by 1 from the previous quarter.

80,000 yuan / ton to 7.

90,000 yuan / ton, the company may hedge some losses caused by falling prices by increasing sales.

Others: The business tax and the “three fees” both increased to varying degrees from the previous month, and the business tax and surcharge1.

71 (+0.

83) 100 million yuan; administrative expenses 1.

55 (+0.

47) 100 million yuan; financial expenses 2.

22 (+1.

05) Ten thousand yuan.

But net investment income4.

84 (+4.

59) billion yuan, mainly because it holds about 2% of SQM’s total share capital.

When 1% of Class B shares are transferred to long-term equity investment this year, the gains and losses from changes in fair value that were originally included in other comprehensive income are transferred to investment income.

The 2018 performance was basically in line with expectations.

Main: In 2018, the company produced 72 lithium ore and lithium chemicals.

4 (+7.

75) and 3.

96 (+0.

7) Bulletin.

Gross profit increased by 3.8.4 billion to 42.

2.1 billion.

Although the average market price of lithium carbonate dropped by 3.

10,000 yuan / ton to 11.

99 million yuan / ton, but the company’s lithium products contain some lithium hydroxide, the unit price of sales fell by only 0.

78 million / ton.

At the same time, the incremental increase, the gross profit still increased significantly.

Other: Business tax surcharge: 2.

09 (+1.

53) 100 million yuan, mainly due to the payment of Chilean stamp duty on M & A loan contracts; financial expenses: 4.

71 (+4.

16) 100 million yuan, which is to complete the purchase of SQM 23.

77% of shareholders increased supplementary expenses by 3.5 billion U.S. dollars, and the exchange rate increase of the US dollar and Australian dollar caused Wenfield exchange losses to increase.

But relying on net investment income5.

39 (+5.

12) Ten thousand yuan, so the company’s profits increase every year.

Growth is the main logic of future performance.

Endogenous Expansion: Currently, Phase II of Phase II is about to be completed in the second quarter of 2019, and Phase III will be completed in the fourth quarter of 2020 and start trial production.

The first phase of lithium hydroxide was put into production this year, and the investment of the second phase has been completed43.

51%, two production capacity each.

4 years.

Suining lithium carbonate 2 has begun to invest initially / year.

Outbound M & A: The company took 278.

$ 4.4 billion in cash for 23 of SQM acquisitions.

77%, the shareholding ratio rose to 25.


At least the world’s largest salt lake lithium extraction company, with excellent resources, has 8.

22 Lithium carbonate production 武汉夜网论坛 capacity will be further expanded in the future.

Earnings forecasts, estimates and investment ratings.

According to 2019E / 2020E / 2021E lithium carbonate prices are 7/6.

5/6 (ten thousand yuan / ton) and other assumptions, we predict that the net profit attributable to 2019E / 2020E / 2021E will be 3.



17 (US $ million) (the Navy budget is 21/28 / (US $ million)) and the EPS is 0.



8 (yuan / share).

Corresponds to the closing price of 29 on April 30.

63 yuan, PE is 86/48/37 (times), although the short-term company has no estimates, but the long-term value is outstanding, maintaining the “recommended” rating.

Risk warning: financial costs exceed expectations, lithium prices fell more than expected.