[agency Review] Tianyuan Co., Ltd. plans the Lithium Iron Phosphate Integration Project to further improve the layout of cathode materials.

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Plan the lithium iron phosphate integration project and improve the layout of cathode materials: Tianyuan shares issued an announcement, plans to set up a wholly-owned sub-holding company to build an annual output of 100000 tons of lithium iron phosphate cathode material project, supporting an annual production capacity of 100000 tons of iron phosphate precursor project, an annual output of 80, 000 tons of wet process phosphoric acid integration project. The project plans to invest 2.389 billion yuan, which will be solved by the company itself. The construction period is expected to take 24 months, and the company will raise funds by itself. The annual net profit of the project is expected to be 689 million. After successful commissioning, the company will become an enterprise with lithium iron phosphate and ternary cathode materials that is scarce in the industry, and the ability to support the new energy industry will be further enhanced.

The advantages of supporting its own iron phosphate resources and customer base are obvious: phosphorus is the largest part of iron phosphate cost, accounting for about 40%; the company has its own Mabian annual production capacity of 900000 tons of high-quality phosphate rock resources (grade 26% Mo 28%, reserves more than 30 million tons), corresponding to about 250000 tons of P2O5 supply capacity, while the annual production of 100000 tons of iron phosphate requires about 50,000 tons of P2O5 per year, and the company has sufficient phosphorus source supporting capacity. On the other hand, the high-titanium slag project equipped with titanium chloride in Pingshan base can produce a large number of high-quality iron raw materials, and the company has complete phosphorus and iron resources, which will have obvious cost advantages. Yibin, as the location of the world-class lithium power industry cluster pulled by Ningde era, the company further shows the potential and first-mover advantages of supporting new energy industry. We believe that on the basis of the company's existing three-yuan positive electrode and strategic cooperation with Ningde, the future sale of lithium iron phosphate is also guaranteed.

Growth will continue to release: the participating subsidiary Yibin Libao three-yuan cathode has reached an annual production capacity of 30, 000 tons, with an annual production capacity of 150000 tons planned for the medium term. Haifeng and Thai Phase II titanium chloride plant has completed the commissioning of a single unit and entered the overall commissioning stage, and the annual production capacity is expected to reach 100000 tons next year, with an annual output of 400000 tons planned in the middle of the year. Changneng Coal Mine has an annual output of 450000 tons of high-quality anthracite, which is expected to be put into production next year, which will open up the advantage of coal-calcium carbide-PVC integration, and PVC downstream high-performance pipelines and other products continue to extend the traditional product value chain. The company is in a high-speed release period of growth.

Financial Forecast and Investment suggestion

We predict that the company's EPS for 21-23 will be 0.86 pound 1.27 won 1.63 yuan (excluding lithium iron phosphate project), give the target price 19.05 yuan according to the comparable company's 22-year price-to-earnings ratio of 15 times, and maintain the buy rating. The risk indicates that the new capacity is not as expected, and the risk of price fluctuation of products and raw materials.