Chengxin Lithium(SZ:002240) Haitong Securities·2024-10-23 09:38Investment Rating - The investment rating for the company is "Outperform the Market" [1][5][8] Core Views - The acquisition of the mining license for the Muroong lithium mine marks a significant breakthrough in resource development for the company, which is expected to enhance its lithium resource self-sufficiency and cost competitiveness in lithium salt production [4][5] - The company is expanding its global lithium resource layout, with projects in both hard rock mining and salt lake lithium extraction, which will contribute to a sustained increase in lithium production from 2024 to 2027 [4][5] - The company has established lithium product production bases globally, with a total lithium salt production capacity of 137,000 tons/year and metal lithium capacity of 500 tons/year as of mid-2024 [4] Summary by Sections Market Performance - The company's stock has shown a significant decline of 52.16% from October 2023 to January 2024, compared to the Haidong Composite Index [2] Financial Forecast - Revenue is projected to decline from 7,951 million yuan in 2023 to 6,446 million yuan in 2024, followed by a recovery to 9,632 million yuan in 2025 and 12,119 million yuan in 2026 [6][10] - Net profit is expected to drop sharply to 34 million yuan in 2024, with a significant rebound to 561 million yuan in 2025 and 1,118 million yuan in 2026 [6][10] - The earnings per share (EPS) forecast for 2024, 2025, and 2026 is 0.04 yuan, 0.61 yuan, and 1.21 yuan respectively [5][10] Resource Development - The Muroong lithium mine is noted as the largest hard rock lithium deposit in Asia, with a total identified resource of 61.095 million tons and lithium oxide content of 989,600 tons, with an average grade of 1.62% [4] - The company holds a 52.20% stake in Huirong Mining, which operates the Muroong lithium mine, and has signed a cooperation framework agreement with Zhongchuang Innovation to supply lithium salt products [4] Production Capacity - The company has various lithium resource projects, including the Yilonggou spodumene mine in Sichuan with an annual production capacity of 75,000 tons of lithium concentrate, and the Sabi Star lithium tantalum mine in Zimbabwe with an annual capacity of approximately 290,000 tons of lithium concentrate [4] - The company is also developing a lithium salt project in Argentina with an annual capacity of 2,500 tons of lithium carbonate equivalent [4] Valuation - The company is expected to achieve a price-to-earnings (PE) ratio of 22-25 times for 2025, leading to a reasonable value range of 13.42 to 15.25 yuan per share [5][8]