Outstanding performance Lithium Resources sector is booming [Agency Review]

1. Lithium resources enterprises have made outstanding achievements, and the plate boom continues. Lithium plate (Shenwan II) enterprise performance forecasts are all released, 4 lithium resources enterprises are all happy. According to the 2021 performance forecasts issued by various companies, the company with the largest year-on-year increase is Shengxin LiNeng. The company expects to achieve a cumulative return net profit of 8.3-920 million yuan during the reporting period, an increase of about 2954.31%-3285.50% over the same period last year. The second largest year-on-year growth enterprise is Ganfeng Lithium Industry, which is expected to achieve a net profit of 48-5.5 billion yuan during the reporting period, an increase of 368.45%-436.76%. Tianqi lithium industry and Tibet mining industry have turned losses into profits. The continuous strengthening of the prosperity of the lithium resources industry has formed a great push on the performance of lithium resources enterprises. In 2021, the cumulative sales of new energy vehicles in China reached 3.521 million, an increase of 157.5% over the same period last year. The large volume of new energy vehicle market has led to the demand for all kinds of lithium materials. Looking ahead, in the short term, although a number of lithium resources companies around the world are speeding up their production projects, it is expected that most of the new capacity will begin to be released in the second half of 2022. In the long run, with the continuous promotion of the global low-carbon transformation, the scale of the new energy vehicle market will continue to expand. Under the background of the continued prosperity of the new energy vehicle industry in the future, the prosperity of the lithium resources industry is expected to remain high. The performance of various lithium resources enterprises is expected to continue to be bright.

two。 Among the major non-ferrous metals, copper rose 4.0% a week, while the price of lead fell. In terms of copper prices, as of February 04, 2022, COMEX Copper week rose 4.0%. The rise in copper prices is mainly affected by fluctuations in the political environment in South American countries. Due to the refusal of local communities and environmental protection agencies to issue operating licenses to copper mining enterprises, the current supply of copper resources may be limited. In terms of lead prices, LME lead fell 3.3 per cent in the week to February 04, 2022. China is a major producer of lead-acid batteries in the world. affected by the Spring Festival, downstream battery factories have stopped production, and the global lead demand has declined to a certain extent.

3. New highs in oil prices have pushed up inflation expectations and the upward momentum in gold prices has intensified. Recently, international oil prices have risen one after another. as of February 04, 2022, the main continuous futures price of Brent crude oil was at US $93.3 per barrel, up 3.6% a week. The previous week, the main continuous futures price of WTI crude oil was up 2.4% at US $92.3 per barrel, up 6.3% a week, and 2.0% the previous week, both setting new highs since 2014. Against the backdrop of high crude oil prices, global inflation expectations are rising further, and the upward momentum of gold prices is strengthening.

4. Market review. From January 24, 2022 to January 28, 2022, one of the nine CITIC non-ferrous metal subplates rose throughout the week and eight fell. Among them, the lithium plate rose the most, rising 6.6%, while the copper plate fell the most, falling 8.7%. In terms of individual stocks, the top three weekly gains were Hesheng shares, Ganfeng Lithium Industry, and Tianqi Lithium Industry, with weekly increases of 10.9%, 9.2% and 7.8%, respectively, while Baotian shares, Asia-Pacific Technology and Yunnan Aluminum shares fell by 15.8%, 15.5% and 15.0% respectively.

Investment suggestion

Under the sustained high prosperity of the lithium resources industry, the upstream production enterprises of new energy may benefit, such as Salt Lake shares, Tianqi Lithium Industry, Zangge Mining and so on.

Risk hint

The sales growth of new energy vehicles is less than expected, the international epidemic situation is repeated, the safety and environmental protection policy changes and so on.