The double Kings "protect the Dharma"! Lithium industry "upstart" is about to launch IPO!

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Shenzhen main board in 2018 will be whether, in 2020 to gem, sponsor institutions for Dongxing Securities, lithium materials company Ganzhou Tengyuan Cobalt New Materials Co., Ltd. (referred to as "Tengyuan Cobalt Industry"), agreed by the CSRC on December 21, gem IPO registration effective, now only to negotiate to determine the issuance schedule, and have published IPO documents.

The double Kings "protect the Dharma"

The data show that Tengyuan Cobalt owner's business is the research and development, production and sales of cobalt and copper products, and it is one of the most competitive cobalt salt production enterprises in China. The company's core products are cobalt salts such as cobalt chloride, cobalt sulfate and copper electrowinning. Cobalt products are mainly used in battery materials, alloys, magnetic materials and other downstream industries.

According to the prospectus (registration draft), as of December 21, Tengyuan cobalt founders Luo Jie (29.90%), Xie Fubiao (13.78%) and Wu Yanghong (6.80%) have signed a "concerted Action Agreement", which is the common actual controller. The three directly and indirectly directly hold 50.48% of the shares of the issuer and are the controlling shareholders and actual controllers of Tengyuan Cobalt.

In addition, the names of Xiamen Tungsten Industry (600549), Ganfeng Lithium Industry (002460) and Changjiang Morning Road can be seen on the shareholder list, of which Xiamen Tungsten Industry is the third largest shareholder with a stake of 12.07%; Ganfeng Lithium Industry is the fourth largest shareholder with a stake of 6.90%. Changjiang Chendao is the fifth largest shareholder of Ningde Times, with a stake of 6.85%.

Ganfeng lithium industry is a lithium industry giant, Ningde era is the number one battery, some industry insiders laugh that Tengyuan cobalt industry is the blessing of two kings "Dharma protection".

As for part of the reason for the investment, Xiamen tungsten industry has said that cobalt is the auxiliary material needed for the processing of Xiamen tungsten industry's main products. At the same time, Tengyuan Cobalt has an overseas mining right and a number of overseas subsidiaries.

Ganfeng Lithium Industry has said that Tengyuan Cobalt has introduced the technical resources needed by the company and has a strong imagination of cooperation. However, whether or not long-term cooperation depends on the actual operating conditions of both sides.

Raise 2.198 billion yuan

According to the prospectus (registration draft), IPO, Tengyuan Cobalt intends to raise 2.198 billion yuan this time. After deducting the issuing expenses, the raised funds will be invested in accordance with the priority order: annual output of 20,000 tons of cobalt, 10,000 tons of nickel metal series products remote intelligent technological transformation and upgrading and supporting production projects of raw and auxiliary materials (phase II), as well as supplementary liquidity (to be invested to raise 500 million yuan).

In terms of market position, statistics show that the total domestic output of cobalt sulfate is 39000 metal tons, and the total output of cobalt chloride is 43000 tons, totaling 82000 metal tons. The company's cobalt salt output is 4858.97 metal tons, accounting for 5.92%; cobalt sulfate production accounts for 6.37%; cobalt chloride output accounts for 5.53%, ranking fifth in the country.

In terms of customers, during the reporting period, the top five customers accounted for 62.21%, 52.65%, 61.43% and 69.83% of the operating income respectively, maintaining a high level, and there was no case that the proportion of sales to individual customers exceeded 50% of the total. In 2019 and 2020, the company added two new customers, Mercuria and Wanbao Minerals. TRANSAMINE TRADING S.A. And CITIC METAL (HK) LIMITED2 customers have been working with the company since 2020.

In the first half of 2021, the top five customers of Tengyuan Cobalt Industry are Zhongwei Corporation, CITIC METAL (HK) LIMITED2, Xiamen Tungsten Industry, TRANSAMINE TRADING S.A., and Wanbao Minerals.

In terms of product sales, the prospectus (registration draft) shows that from 2018 to 2020, the sales volume of Tengyuan cobalt products equivalent to metal tons was 4787.10 tons, 6202.61 tons and 4669.54 tons respectively, and the sales volume of copper products was 5378.7 tons, 14300 tons and 18100 tons respectively. Maintain a high sales level.

In the first half of this year, the company's sales of cobalt and copper products equivalent to metal tons were 3643.5 tons and 10200 tons respectively.

In terms of performance, from 2018 to 2020, the operating income of Tengyuan Cobalt Industry was 1.671 billion yuan, 1.739 billion yuan and 1.787 billion yuan respectively, and the net profit of shareholders belonging to the parent company was 182.1 million yuan, 114 million yuan and 348 million yuan respectively.

Judging from the latest results, the operating income of Tengyuan Cobalt Industry from January to September 2021 was 2.922 billion yuan, an increase of 123.12% over the same period last year, and the net profit was 760 million yuan, an increase of 82.73% over the same period last year. Tengyuan Cobalt said that the increase in performance was mainly due to an increase in the sales price and quantity of cobalt products and copper products over the same period last year, which was caused by a larger increase in gross profit.

In addition, Tengyuan Cobalt Co predicts that its operating income will be about 3.477 billion yuan to 4.25 billion yuan in 2021, an increase of about 94.57% to 137.80% over the same period last year. The net profit attributed to the shareholders of the parent company is expected to be about 862 million yuan to 1.054 billion yuan in 2021, an increase of about 68.06% to 105.40% over the same period last year. It is estimated that after deducting non-recurring profits and losses, the net profit attributable to the shareholders of the parent company is about 857 million yuan to 1.047 billion yuan, an increase of about 146.58% to 201.37% over the same period last year.

In terms of gross profit margin, from 2018 to 2020 and from January to June 2021, the gross profit margin of Tengyuan cobalt products was 29.41%, 16.78%, 28.29% and 39.87% respectively, showing an overall upward trend, while the gross profit margin of copper products rose all the way up to 44.13% in the first half of this year. The consolidated gross profit margin was 41.3% in the first half of this year.

Compared with companies in the same industry, the gross profit margin of Tengyuan Cobalt Industry is much higher than that of Huayou Cobalt Industry and slightly higher than that of Hanrui Cobalt Industry.

In terms of foreign investment, Tengyuan Cobalt has set up two Hong Kong subsidiaries and one Congo (Kinshasa) subsidiary abroad, initially constructing the global layout of the company's cross-border operation. The Democratic Republic of the Congo (DRC) and neighboring Zambia are both important copper and cobalt ore belts in the world, and are rich in copper and cobalt ore reserves, of which the Democratic Republic of the Congo (DRC) has about 50% of the world's proven cobalt ore reserves. It is of great significance for the company to set up a subsidiary in the DRC and gradually carry out raw material procurement and processing business locally, which is related to the company's raw material supply and operational stability. However, the local political situation in the Democratic Republic of the Congo (DRC) is not very stable, economic and social development is relatively backward, Tengyuan Cobalt Industry is also facing many risks and challenges.

In addition, the subsidiary Congo Tengyuan made a great contribution to the income and profit of Tengyuan Cobalt Industry from 2019 to 2020, and Tengyuan Cobalt Industry depended on Congo Tengyuan to a certain extent.