Huayou Cobalt (603799) Third Quarterly Report Review: Benefit from Cobalt Price Upward Significant Improvement in Third Quarter Results

Huayou Cobalt (603799) Third Quarterly Report Review: Benefit from Cobalt Price Upward Significant Improvement in Third Quarter Results

Event: On October 28, the company announced three quarterly reports and achieved revenue of 140 in the first three quarters of 19 years.

2.3 billion, a year-on-year increase of +39.

20%; net profit attributable to mother 0.

93 billion yuan, up 95.

15%; net profit after deduction is 0.

44 billion, a year-on-year increase of 97.

65%.

Among them, Q2 achieved revenue of 49.

19 billion, a year-on-year increase of +49.

49%, +4 from the previous quarter.

59%; net profit after deduction is 0.

85 billion, a year-on-year increase of 76.

21%, turnaround loss (Q2 is -0.

5.8 billion).

In addition, the company intends to issue shares to acquire Huayou Luzhou 15.

68% equity, consideration 8.

05 ‰; At the same time, the funds raised are not more than 800 million, which is mainly used for 3 battery pack-level nickel sulfate projects.

Opinion: The bottom of the cobalt price is upward, and the third quarter performance has improved significantly.

MB cobalt price fell unilaterally from an 18H1 high of nearly US $ 44 / lb to US $ 12 / lb at the end of July, and then the cobalt price bottomed upward and rebounded to US $ 18 / lb.

The rebound in Q3 Colombian prices obviously drove the company’s profit, Q3 deducted the non-returned net profit and realized losses, and the asset impairment loss was flushed back to 0.

6.8 billion yuan.

Cobalt prices bottomed out to stabilize, supply and demand laid the foundation, and bullish cobalt prices will rise next year.

In early August, Glencore announced that it would cease production and maintenance of the Mutanda mine at the end of 19 (last year’s output was 2.

70,000, accounting for over 20%), Mutanda maintains more because of technical reasons for the transformation of oxidized ore to sulfide ore, and its copper output increased by 47% in the first half of the year.

明年需求端增量明显:1)智能手机近两年电池容量再上台阶,5G带动堆叠+ 5G手机单机容量再提升; 2)新能车迎来国内20年200万辆大考,国产化型号 3Landing & overseas OEMs start mass production cycle and start new industry trends.

Accelerate the 杭州桑拿网 layout of materials and create a ternary closed loop.

The company’s cooperation projects with LG and Posco have been progressing steadily. In 19 years, LG 4 mark + 5K tons of Posco Phase I are expected to be put into production.

In 18 years, the company started a laterite nickel mine project in Indonesia; acquired 70% equity of TMC + Luzhou Huayou to extend the recycling of ternary lithium batteries; subscribed for AVZ equity and involved in lithium resource exploration and mining.

From mining to materials to recycling, to create a closed ternary material industry chain.

Profit forecast and rating: The company improves the layout of the industrial chain and builds a closed industrial chain.

It is expected that the company will realize net profit attributable to mothers in 19-20 years1.

76, 8.

5.1 billion, corresponding to 153/32 times PE.

Due to the contraction of the supply side of cobalt next year, the demand side is obviously upward, and at the same time the industrial chain cobalt inventory is low. We are bullish on the cobalt price going up next year, and upgrade the company to a “buy” rating.

Risk warning: New energy vehicle sales fall short of expectations; Glencore’s resumed production exceeds expectations.