In A shares, not only liquor but also lithium carbonate have gross profit margins exceeding 90%.
On the evening of July 25, Zangge Mining (SZ000408, stock price 36.71 yuan, market value 58 billion yuan) released the 2022 semi-annual report, the company achieved operating income of 3.51 billion yuan in the first half of 2022, a year-on-year increase of 218.53%, and net profit attributable to the parent was 23.97 100 million yuan, a year-on-year increase of 438.01%.
Among them, the gross profit rate of potassium chloride is 73.10%, and the gross profit rate of lithium carbonate is as high as 90.52%. 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.
It is not difficult to find that there is a gap between the evaluation of 352,400 yuan/ton and the market price approaching 500,000 yuan/ton. Li Ruixue, secretary of the company’s board of directors, told the “Daily Economic News” reporter that market quotations are generally tax-inclusive quotations. The lithium carbonate sales revenue disclosed in the company’s semi-annual report is tax-exclusive income. Since the value-added tax is a tax outside the price, it is not included in the price. in the company’s sales revenue. In the semi-annual report, the company’s unit price of lithium carbonate excluding tax is 350,000 yuan/ton, and the unit price including tax is 398,000 yuan/ton, which is closer to the average market price.
The gross profit margin of lithium carbonate is as high as 90.52%
On the evening of July 25, Zangge Mining (000408SZ, stock price of 36.71 yuan, market value of 58.02 billion yuan) released its 2022 semi-annual report. The company achieved operating income of 3.51 billion yuan in the first half of 2022, a year-on-year increase of 218.53%; net profit attributable to the parent was 23.97 100 million yuan, a year-on-year increase of 438.01%.
Zangge Mining’s net profit margin in the first half of the year was close to 70%, and this part still came from the high gross profit of potash fertilizer and lithium carbonate.
According to the semi-annual report, Zangge Mining’s main products are potassium chloride and lithium carbonate, accounting for 51.30% and 48.25% of its revenue, respectively.
The gross profit margin of potassium chloride is 73.10%, and the gross profit margin of lithium carbonate is as high as 90.52%.
Zangge Mining said: In the first half of 2022, the sales volume and sales price of potassium chloride increased compared with the same period of the previous year, resulting in an increase of more than 30% in operating income compared with the same period of the previous year; in the same period, the price of lithium carbonate increased, resulting in an increase in operating income and gross profit margin. Year-on-year growth of more than 30%. “
The high gross profit of lithium carbonate is not unexpected. After all, everyone knows that the price of lithium salt has risen sharply.
Taking battery-grade lithium carbonate as an example, according to statistics from Shanghai Nonferrous Metals Network, the average spot price once rose from 278,000 yuan/ton at the beginning of the year to the highest point in mid-to-late March of 503,000 yuan/ton, an increase of 80.94%.
According to the announcement, in the first half of this year, Zangge Mining produced 4,770 tons of lithium carbonate, a year-on-year increase of 55.17%, and its sales volume was 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%.
However, it should be noted that if the sales of lithium carbonate products are 4,807 tons and the operating income is 1.694 billion yuan, the average sales price of lithium carbonate in the first half of the year is about 352,400 yuan / ton.
It is not difficult to find that there is a gap between the market price of 352,400 yuan/ton and the market price that is close to 500,000 yuan/ton. How is this going?
Li Ruixue, secretary of the company’s board of directors, told reporters that the market quotations are generally tax-included quotations. The sales revenue of lithium carbonate disclosed in the company’s semi-annual report is tax-excluded. Since the value-added tax is a tax outside the price, it is not included in the company’s sales revenue. In the semi-annual report, the company’s unit price of lithium carbonate excluding tax is 350,000 yuan/ton, and the unit price including tax is 398,000 yuan/ton, which is close to the average market price.
The other is production capacity. Zangge Mining has an existing lithium carbonate production capacity of 10,000 tons. In the first half of this year, Zangge Mining produced 4,770 tons of lithium carbonate. On the surface, production in the first half of this year was at half capacity. However, it is necessary to pay attention to the impact of Qinghai’s climate on the extraction of lithium from salt lakes in the second half of the year. Zangge Mining once stated in the investor interaction platform that the degree of influence of lithium carbonate production by the temperature in winter varies with the drop in temperature, for example, if it is above minus 5 degrees Celsius, it will affect daily production (30 tons per day under normal conditions). The proportion is about 6%; if the temperature is above minus 10 degrees Celsius, the proportion affecting Nissan is about 16%; if the temperature is above minus 20 degrees Celsius (for about half a month), the proportion affecting Nissan is about 50%.
Zangge Mining produced 7,553.06 tons of lithium carbonate last year, which has not reached full production.
The surprise of dividends of 3 billion yuan
To the surprise of investors, Zangge Mining also plans to distribute dividends to investors in the first half of this year.
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, it earned nearly 2.4 billion yuan, and the dividends will be 3 billion yuan. Naturally, this cash dividend needs the support of monetary funds in the book. As of the end of the first half of the year, Zangge Mining’s book monetary capital was 3.945 billion yuan.
According to the cash dividend of 18.98 yuan (tax included) for every 10 shares, Zangge Mining’s dividend rate (static) reaches 5%. If there is another dividend at the end of the year, the dividend yield of Zangge Mining will be even higher.
Interestingly, the sharp rise in product market prices has also made Zangge Mining, which has not paid dividends for a long time, feel like a blue-chip consumer stock – this is Zangge Mining’s highest cash dividend plan since it went public through a “shell” in 2016.
Of course, the beneficiaries also include Xiao Yongming, the actual controller, and those acting in concert.
As of June 30 this year, the actual controller of Zangge Mining, Xiao Yongming, and its concerted parties, Tibet Zangge Venture Capital Group Co., Ltd. and Sichuan Yonghong Industrial Co., Ltd. held a total of about 775 million shares in the company, and the total shareholding ratio accounted for 49.01% of the company’s total share capital. According to rough statistics, Xiao Yongming and his concerted actors will receive more than 1 billion yuan in cash income.
Last month, Zangge Mining announced that the company received the “Criminal Judgment” (2021) Qing 0104 Xing Chu No. 88 provided by Xiao Yongming. Defendant Xiao Yongming committed the crime of illegal mining and was sentenced to three years in prison, suspended for four years, and fined two million yuan (paid in full).
Zangge Mining also mentioned the progress of the Mamicuo mine. The project is currently monitoring the EIA data, striving to pass the EIA as soon as possible, and simultaneously prepare for the pre-construction work. The project is developed in modules, and the production schedule is determined by the equipment installation.
Cover image source: Visual China
