Long-term lithium division: product supply exceeds demand net profit increases by 5 times new production capacity is expected to be put into production around the end of the year

Driven by high downstream demand, long-term lithium (688779.SH) production and sales are booming, and the net profit will increase more than fivefold in 2021. A person from the company's securities department told the Financial Associated Press that downstream demand is relatively strong. The company's products are in short supply. At present, the 40,000 tons of ternary cathode materials and 60,000 tons of lithium iron phosphate projects in the second phase are under construction and are expected to be put into production by the end of this year and early next year respectively.

On the evening of February 16, the company announced its results, KuaiBao, with revenue of 6.84 billion yuan in 2021, an increase of 240.25% over the same period last year, and a net profit of 700.6396 million yuan, an increase of 538.17% over the same period last year. The net profit figure has exceeded the upper limit of the previous pre-increase of 519.37% Murray 537.58%.

The above company personage said that the performance of KuaiBao will be a little more detailed than the forecast, that is, more than 600,000 yuan, which is still within a reasonable range. With regard to the net profit growth rate higher than the revenue growth rate, she said that the strong demand for new energy vehicles last year led to a surge in the installed capacity of power batteries, and the company's production line was running at full capacity. With the significant increase in capacity utilization, large-scale production achieved cost reduction and efficiency.

KuaiBao shows that the company raised the price of its products last year. The above-mentioned person of the company said that if the price of upstream raw materials rises, it means an increase in the cost end for the company. now the price of lithium carbonate exceeds 400000 yuan per ton, and the proportion of the company's raw material cost is still relatively high. to ensure that the company's profits are within a reasonable range, it is necessary to adjust the price of the product and raise the price a little bit. In addition, due to the relatively strong demand downstream, in the case of product supply falling short of demand, adjusting product prices downstream is also acceptable.

The reporter noted that the company is recruiting on the eve of the Spring Festival, and plans to recruit 200 front-line production operators, as well as R & D engineers, production supervisors and equipment supervisors. According to the above people, the company's products have entered the supplier system of mainstream lithium battery manufacturers such as Ningde era, BYD, Yiwei Lithium Energy, Xin Wanda and other mainstream lithium battery manufacturers, and are conducting new customer certification for a variety of products. In order to ensure that the order is delivered on time, the production line of the company has not been stopped during the Spring Festival and has been in continuous production.

She also said that the company's 40,000-ton second-phase project currently under construction is expected to be put into production by the end of this year, and another 60,000-ton lithium iron phosphate project is already under construction and is expected to start production in early 2023. The first phase of 40,000 tons of the company has been put into production in 2021, but it has not reached the condition of full production, and it is expected to bring incremental performance to the company this year. However, the new capacity also depends on the annual capacity utilization and this year's market conditions and product prices, which are still uncertain.

It is reported that the company currently has a production capacity of 30,000 tons of precursors, and the proportion of self-supply of precursors is relatively high. However, with the release of the production capacity of some ternary cathode materials this year, the self-supply ratio of precursors will decrease, and the self-sufficiency ratio of precursors will be further improved in the future. In addition, the company has reached cooperation with a number of lithium salt suppliers to ensure the production of lithium salt needed by the company's current and new production capacity.