Now that it has entered the 2022 semi-annual report disclosure period of A-share companies, Zangge Mining, a major salt lake lithium extractor, has thrown its first generous dividend plan.
Zangge Mining disclosed its semi-annual report on the evening of July 25. The company achieved a net profit of 2.397 billion yuan in the first half of the year, a year-on-year increase of 438.01%. At the same time, the company plans to distribute cash dividends of 18.98 yuan (tax included) to all shareholders for every 10 shares, with a total cash dividend of about 3 billion yuan (tax included). The reporter noticed that the total amount of dividends in this plan was about 600 million yuan higher than the company’s net profit in the first half of the year.
Large lithium mines throw out medium-term high dividend plan
Thanks to the continuous rise in the price of lithium salt products, Zangge Mining, which has some resources in the Chaerhan Salt Lake, made good profits in the first half of this year.
According to the semi-annual report, Zangge Mining achieved operating income of 3.51 billion yuan in the first half of the year, a year-on-year increase of 218.53%; net profit of 2.397 billion yuan, a year-on-year increase of 438.01%; basic earnings per share was 1.5164 yuan.
The good profit base has allowed Zangge Mining to come up with the highest cash dividend plan since its backdoor listing in 2016. According to the announcement, Zangge Mining intends to distribute a cash dividend of 18.98 yuan (tax included) to all shareholders for every 10 shares based on the total share capital of 1.58 billion shares. Based on this calculation, the total proposed cash dividend is about 3 billion yuan (tax included).
In the first half of the year, the net profit was 2.4 billion yuan, but the dividends were 3 billion yuan. Some investors could not help but ask, where did the other 600 million yuan of funds come from? For this question, the company answers with good cash flow.
The net cash flow from operating activities of Zangge Mining in the first half of the year was 3.256 billion yuan. It is not difficult to see that even if the company issues a cash “big red envelope” of 3 billion yuan to all shareholders, there will be no money on the account.
Who is the biggest beneficiary of this dividend? Obviously, Xiao Yongming, the actual controller of the company, and his concerted action.
According to the announcement, as of June 30 this year, the actual controller of Zangge Mining, Xiao Yongming, and its concerted actors, Tibet Zangge Venture Capital Group Co., Ltd. and Sichuan Yonghong Industrial Co., Ltd. held a total of about 775 million shares in the company, accounting for 775 million shares of the company. 49.01% of the total share capital. The reporter roughly calculated that Xiao Yongming and his concerted actors would receive cash dividends of about 1.47 billion yuan (tax included).
Regarding Zangge Mining’s generous dividends, a person close to the company told reporters that the company has not paid much dividends since its listing, and this high distribution is now a response and return to investors. “The company’s performance this year is good, and it just happens to have cash flow to support it, so it has made this high dividend plan.”
The semi-annual report reveals the average selling price of lithium carbonate
In addition to the enviable dividend plan, Zangge Mining’s semi-annual report also reveals how profitable it is to extract lithium from the salt lake. From the perspective of the company’s profit and revenue ratio in the first half of the year, the net profit of 2.397 billion yuan accounted for 68% of the revenue of 3.51 billion yuan.
If you want to find out the key points that support the high profit margin of Zangge Mining, then lithium carbonate, which has been at a high price this year, is definitely the number one “hero”. In the first half of the year, lithium salt prices rose fiercely. Taking battery-grade lithium carbonate as an example, according to statistics from Shanghai Nonferrous Metals Network, the average spot price once surged from 278,000 yuan/ton at the beginning of the year to a peak of 503,000 yuan/ton in mid-to-late March.
In the first half of this year, Zangge Mining produced 4,770 tons of lithium carbonate, a year-on-year increase of 55.17%; sales were 4,807 tons, a year-on-year decrease of 10.23%. The lithium carbonate business achieved operating income of 1.694 billion yuan, a year-on-year increase of 449.04%. If it is estimated based on the sales of 4,807 tons of lithium carbonate products and the operating income of 1.694 billion yuan, the average sales price of lithium carbonate in Zangge Mining in the first half of the year is about 352,400 yuan / ton.
Another concern is that, affected by rising prices, the gross profit margin of the already lucrative lithium carbonate products has risen again. Zangge Mining disclosed that the gross profit margin of lithium carbonate products was 90.52%, a year-on-year increase of 60.55 percentage points. That is to say, the production cost of Zangge Mining per ton of lithium carbonate is only 33,400 yuan.
The reporter learned that the current annual production capacity of lithium carbonate in Zangge Mining is about 10,000 tons. For Zangge Mining, when the supply and demand of lithium salt products are tight, the production capacity of 10,000 tons can no longer support the company’s vision of becoming bigger and stronger. Zangge Mining, which has seen the opportunities in the lithium carbonate market, has formulated a “five-year plan” for itself in early March this year, and set a new salt lake lithium project of 1 to 2 million tons of lithium carbonate reserves through acquisitions in the next three years. In five years, the main economic indicators and benefits will reach the lofty goal of tens of billions of dollars.
Looking back, Zangge Mining acquired a 51% stake in the Tibet Mamizuo Salt Lake at the end of 2021 through the acquisition of equity. The salt lake has a reserve of 2.4 million tons of lithium chloride. A person close to Zangge Mining told reporters that the salt lake plans to build a 100,000-ton/year lithium carbonate production line. The reporter recently learned that currently Zangge Mining and the Tibet Autonomous Region government are actively communicating about the development of Mamicuo Salt Lake. If the relevant procedures in the early stage are handled smoothly, the development progress of Mamicuo Salt Lake is expected to be accelerated.Return to Sohu, see more
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