The upstart in the battery lithium industry! Battery-grade lithium fluoride has surpassed Ganfeng and has successfully entered Tesla's supply chain. The market share of the unique and scarce space-age metal is as high as 80%. It has a strong voice and just raised its price in early September (Caitong Securities)
The brokerage’s in-depth research report covers an upstart in the battery lithium industry - China Mining Resources. The company first started in the geological prospecting business, and through extended mergers and acquisitions, it entered the development and processing of light and rare metal resources, mainly cesium, rubidium and lithium.
Its wholly-owned subsidiary Dongpeng New Materials is the biggest highlight. The market share of battery-grade lithium fluoride products is as high as 38%, and it has entered the Tesla industry chain. It is also the largest domestic and third largest cesium salt manufacturer and supplier in the world, with a domestic market share of 75%.
1) An upstart in the battery lithium industry
In 2018, it wholly acquired Dongpeng New Materials and entered the new energy field. It currently has 3,000 tons of battery-grade lithium fluoride production capacity, 6,000 tons of battery-grade lithium carbonate production capacity, and a 25,000-ton micron-grade lithium hydroxide project under construction and is expected to be put into production in the second quarter of 2021.
Dongpeng New Materials’ performance commitment is that the cumulative net profits achieved from 2018 to 2020 will not be less than 160 million, 340 million and 540 million respectively. As of December 31, 2019, Dongpeng New Materials 2018 -The cumulative net profit in 2019 has reached 445 million yuan, exceeding its performance commitment.
Dongpeng New Materials has the invention patent for battery-grade lithium fluoride and is one of the three major suppliers in the country. The company has a market share of 38%, followed by Ganfeng Lithium Industry. The rate is 19%. We have established long-term cooperation with customers such as Morita Chemical. Moreover, Morita Chemical is the main supplier of electrolyte for Tesla power batteries (Panasonic). By continuously supplying high-quality lithium fluoride to Morita Chemical, the company has successfully entered Tesla's supply chain.
In addition, the price of lithium hexafluorophosphate has recently begun to increase, and A-share related companies such as Tianji Shares and Duofuoduo have experienced significant increases. The company's lithium fluoride is the main raw material of lithium hexafluorophosphate, accounting for 28% of the cost. Provide lithium fluoride products to domestic leading lithium hexafluorophosphate and electrolyte companies.
2) Cesium - Space Age Metal
The company is also the world's largest manufacturer of cesium and rubidium products. With the world's main high-quality cesium resources (Canada's Tanco mine) and the world's two largest production With the advantages of bases (Winnipeg, Canada, Xinyu City, Jiangxi Province, China) and cesium formate recovery and processing (Aberdeen, UK and Bergen, Norway), the business covers the entire cesium mining, processing business, cesium fine chemicals and end consumer markets. industrial chain. By controlling resources, the market share of cesium and rubidium salt products will gradually increase to more than 80%, and it will have pricing power.
Cesium is widely used and is known as the space age metal. Downstream applications include national defense and military industries, such as night vision imaging, special glass, radioactive alarms, photoelectric tubes, radio electronic tubes, and military infrared signal lights; aerospace, such as atomic clocks (no less than 1 second in 20 million years), rocket propellants (1kg cesium is excluded) The thrust produced by the upper space is 1,100 times greater than that of any other fuel, and the ion propulsion engine (10%-15% lighter than conventional engines)
Prices have begun to increase recently. Among them, the prices of cesium carbonate and cesium sulfate increased by 24% and 6% respectively.
3) Valuation:
Through business spin-offs, securities companies believe that the company’s position is high. The traditional exploration business has maintained steady growth. The lithium salt business has benefited from the release of production capacity and the continued growth of downstream new energy vehicles. The market share of the cesium and rubidium business has continued to increase and has broad application space. Compared with its peers in various businesses, it is obviously underestimated.
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