On March 30, 2020, Huayou Cobalt released its annual report that its operating income in 2020 was 21.187 billion yuan, an increase of 12.38% over the same period last year, and the net profit belonging to shareholders of listed companies was 1.165 billion yuan, an increase of 874.48% over the same period last year.
Huayou Cobalt Industry is mainly engaged in the R & D and manufacturing business of new energy lithium materials and cobalt new materials, forming an industrial pattern of integrated and coordinated development of resources, non-ferrous materials and new energy.
COVID-19 epidemic swept the world, the world economy is facing tremendous downward pressure and recession risk, the new energy vehicle market has also been negatively affected, but the long-term trend of healthy and stable development of the new energy vehicle industry has not changed. The domestic new energy vehicle market was hit by the epidemic in the first half of 2020, and the sales of new energy vehicles dropped sharply compared with the same period last year, but as the epidemic was gradually brought under control, the sales of new energy vehicles resumed growth from July. At the same time, China has issued a number of new energy vehicle policies, such as the policy of subsidy for the purchase of new energy vehicles and the extension of the policy of exemption from purchase tax for two years to the end of 2022, the new double points policy will be officially released in the annual report of 2020, the "Development Plan of New Energy vehicle Industry (2021m 2035)", and the proposal to achieve carbon neutrality in 2060, etc., in order to promote the consumption of new energy vehicles and boost the domestic market demand, It is of great significance to improve the long-term high-quality development of the industry. Benefiting from the counter-trend growth of the new energy vehicle industry, the power battery, as one of the three core components of the new energy vehicle, has also made rapid development. Under the special circumstances of the epidemic, home-based work and online learning have greatly boosted the market demand for PC. Under the background of the great development of the new energy lithium industry and the intelligent terminal industry represented by 5G, the new energy lithium material industry and cobalt new material industry that the company is engaged in are emerging industries supported by the national development strategy and industrial policy. the products produced are the necessary core materials for new energy materials such as ternary power batteries, so Huayou Cobalt has maintained good development and satisfactory performance.
In 2020, Huayou Cobalt sold a total of 33320 tons of precursors, up 136.13% from the same period last year; sold 22631 tons of cobalt products, down 8.19% from the same period last year (due to some market demand turned to entrusted processing business); and sold 78315 tons of copper products, an increase of 18.01% over the same period last year. Cobalt products and precursor Synchronize achieved a historic breakthrough in sales of tons. For the whole year, a total of 33364 tons of cobalt products were produced (including 7180 tons of entrusted processing), an increase of 10.63 percent over the same period last year, 34710 tons of precursors, an increase of 163.67 percent, and 98633 tons of copper products (including 15414 tons of entrusted processing), an increase of 38.19 percent over the same period last year.
Thanks to the stabilization and rebound of product prices, the comprehensive gross profit margin rebounded steadily with the enterprise, and the comprehensive gross profit margin improved to 15.66%, an increase of 4.5 percentage points over the same period last year, of which the gross profit margin of cobalt products increased by 9.82 percentage points to 21.05%; the gross profit margin of copper increased by 12.50 percentage points to 44.97%; and the gross profit margin of ternary precursors increased by 1.38 percentage points to 17.29%.
The company currently plans to produce 105000 tons of nickel, 60, 000 tons of nickel and cobalt in China, and 45000 tons of Huake Nickel. The Huayue Nickel-Cobalt Project has a total investment of 1.28 billion US dollars. The company owns 57% of the project through Huaqing, a wholly-owned company. The project plans to produce 60, 000 tons of mixed nickel and cobalt hydroxide. Construction has officially started in March 2020, and the core equipment has been installed. Trial production is expected to be completed by the end of 2021. After reaching production, Huaqing will underwrite 59% of its products.
Huake Nickel Project has a total investment of US $520 million (3 billion yuan through a fixed increase in capital investment). The company has a 70% interest in the project, and the construction period of the project is 24 months. According to the company's feasibility report, after reaching production, the company's equity income is $330 million (about 2.3 billion yuan), equity profit is $90 million (about 630 million yuan), and the average after-tax profit on equity is $60 million (about 420 million yuan). Considering that the current nickel price is 25% higher than the feasible nickel price to $16255 / ton (March 29th, 2021), the project income is expected to exceed expectations. According to SMM, the project has entered the installation phase of the boiler steel structure of the power plant on March 27, 2021.
Overseas resources projects are also making steady progress. The construction of the Huayue wet process project in Indonesia officially started in March 2020, although it suffered the impact of the epidemic, but with the efforts of the company, the core equipment began to be installed, the project construction advanced in an orderly manner, and the trial production is expected to be completed by the end of 2021. Huake Fire smelting Project, preliminary work has been carried out, such as technical scheme demonstration, main basic construction drawing design and key equipment procurement. The construction of the third phase expansion and renovation project of Rukuni Electrodeposited Copper and MIKAS Wet process Plant in Africa has been completed, and the expansion project of MIKAS tailings reservoir has been carried out as planned.
Stable resource guarantee is the source of the company's competitiveness, and the company actively distributes the recycling plate. Subsidiary Huayou Quzhou and resource regeneration have respectively entered the first and second batches of the list of enterprises in line with the "New Energy Automobile waste Power Storage Battery Comprehensive Utilization Industry Standard conditions" issued by the Ministry of Industry and Information Technology.
The company is a national high-tech enterprise with a complete scientific and technological innovation system. The company has established "Huayou Cobalt Industry New Energy Battery material Provincial key Enterprise Research Institute", "Zhejiang Huayou Cobalt Industry Green Cobalt smelting Technology and New Materials opening 2020 Annual report 15nd 209 Research Institute" and "Huayou New Energy Lithium material Provincial High-tech Enterprise Research and Development Center", mainly engaged in lithium cathode material precursors, multi-element cathode material new product development and advanced manufacturing technology research. And the research on the innovative technology and green manufacturing technology of mining, mineral processing and smelting of cobalt-copper and cobalt-nickel ores, and established a scientific research platform for the development, evaluation and application of battery cathode material precursors which can participate in the international competition.
At present, the company is the largest supplier of cobalt products in China, and its production and sales scale is in the forefront of the world; at the same time, the company is also one of the main suppliers of lithium ternary precursor products in China, and its production and marketing scale and technology development capability are in the forefront of the industry. The company has established a sales network covering domestic and foreign markets and established a stable cooperative relationship with the main downstream customers in the industry to ensure the smooth sales of the company's products. It is expected that the company's future copper and cobalt business, nickel business performance release, the production of ternary precursors cost advantage is further obvious, the company will further expand the growth space, it is expected that there will be better development in the future.
