Tianqi Lithium (002466): Achieved slightly more than expected expansion in an orderly manner

Tianqi Lithium (002466): Achieved slightly more than expected expansion in an orderly manner

The company released the results report for 2018: reporting that the combined company realized operating income62.

44 ppm, an increase of 14 per year.

16%; realize net profit attributable to shareholders of listed companies.

10 ‰, an increase of 3 per year.

03%, slightly exceeding market expectations.

According to the performance report and the company’s third quarterly report, the company achieved operating income in the fourth 北京夜网 quarter14.

USD 8.6 billion, basically the same as the third quarter; net profit5.

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

4.1 billion.

SQM may have investment income.

The company completed the delivery of SQM equity in December, and it is expected that part of the investment income may be the leading quarter-on-quarter increase in net profit.

The expansion of Thaleson is nearing completion.

The company, which holds 51% of the shares, has expanded its production capacity. According to plan, the capacity development of the Greenbushes spodumene mine was expanded to 134 euros / year (equivalent to 16).

75 seconds LCE).

According to the three-phase expansion plan, the company is expected to expand the chemical agent lithium concentrate production capacity to 180 LCE (equivalent to 22) in 2020.
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5 seconds LCE).

The first phase of the Australian lithium salt project is nearing production.

The company ‘s Australian lithium salt processing phase I 2.

The 4 cationic lithium hydroxide production line has been completed in December 18, and is expected to reach production in the middle of 19; Phase 2 2.

4 The capacity of cationic lithium hydroxide is expected to be completed at the end of 19 as planned.

The company’s initial lithium carbonate expansion project in Suining 2 was completed and put into operation in May 20 as planned, and the company’s ore refining capacity exceeded 10 at that time.

SQM equity transfer, investment income is expected to be recognized.

SQM18 achieved net profit in the first three quarters of the year3.

3.1 billion US dollars, long-term net profit is expected to exceed 400 million US dollars.

The company’s acquisition of SQM equity has been completed (the existing holder SQM equity 25.

86%), which is expected to form part of investment income.

SQM owns the mining of Atacama Salt Lake and the mountains of Australia.

50% equity of Dutch lithium mine.

Following the SQM expansion plan, it is expected that lithium resource capacity will be formed in the future.

5 nominal, equity capacity 24.

5.

It is planned to issue Hong Kong stocks and convertible bonds, which will help alleviate financial pressure.

The company intends to issue no more than 3 in the Hong Kong market.

2.8 billion shares; the proposed issuance of convertible bonds will not exceed 5 billion.

The total raised funds of Hong Kong stocks and convertible bonds exceeds 10 billion yuan. Once the raised funds are completed, the company’s one-year debt of US $ 2.3 billion from the acquisition of SQM may be fully repaid.

The company’s financial pressure seeks relief.

Earnings forecast and estimation: We expect that the price of lithium salt will decrease. We forecast the company’s EPS from 2018 to 2020, which excludes contingent investment bank expenses and diluted Hong Kong shares.

90 yuan, 2.46 yuan and 3.

00 yuan is reduced to 1.

93 yuan, 1.

98 yuan and 2.

43 yuan, corresponding to the closing price of 36 on the 27th.

For 61 yuan, the company’s dynamic P / E is 19 times, 18 times, and 15 times, respectively.

The company’s production capacity has been expanded in an orderly manner. The financial pressure on the company after the issuance of Hong Kong stocks and convertible bonds is expected to be eased. Therefore, we maintain the company’s “Buy” rating.

Risk warning: the risk of continued decline in lithium prices, the risk of the company’s expansion of production delays, the risk of investment bank fees affecting profit, the risk of exchange rate changes, etc.