HUAYOU COBALT(603799) 民生证券·2024-08-24 10:30Investment Rating - The report maintains a "Recommend" rating for the company, with projected PE ratios of 11X, 9X, and 7X for 2024-2026 [1][42] Core Views - The company's upstream resource layout is well-established, and downstream lithium battery materials are expected to rapidly scale up, with deep integration with international resource and automotive giants, ensuring high growth certainty and a strong moat [1][42] - The company's integrated layout in the lithium battery materials sector is steadily advancing, with a deep moat in its upstream resource end, and it is expected to stand out in fierce competition due to its cost advantages and technical expertise [1] Financial Performance - In H1 2024, the company achieved revenue of RMB 30.05 billion, a YoY decrease of 9.88%, and net profit attributable to the parent company of RMB 1.671 billion, a YoY decrease of 19.87% [1][7] - In Q2 2024, the company achieved revenue of RMB 15.088 billion, a YoY increase of 5.99%, and net profit attributable to the parent company of RMB 1.148 billion, a YoY increase of 8.23% [1][7] Product Performance - Nickel product output in H1 2024 was approximately 76,000 tons, a YoY increase of over 40%, with the Huafei project reaching full production [1] - Cobalt product shipments in H1 2024 were approximately 23,000 tons, a YoY increase of about 13%, maintaining a leading position in the industry [1] - Lithium battery precursor shipments in H1 2024 were 67,000 tons, a YoY increase of about 11%, driven by increased market share [1] Project Progress - The Huafei 120,000-ton nickel metal wet smelting project achieved full production by the end of Q1 2024, with continuous volume release expected in H2 2024 [1] - The Huayue 60,000-ton nickel metal wet smelting project has been operating steadily and exceeding production targets, with the SCM slurry pipeline fully connected, further reducing MHP production costs [1] - The Huake 45,000-ton nickel metal high-ice nickel project has achieved full production [1] Market Expansion - The company is expanding its market presence in North America and Europe, with the Guimu cathode project in South Korea partially operational and the Hungary cathode material project under construction [1] Future Growth - The company's upstream resource end, including nickel and lithium products, is expected to continue contributing incremental growth, with large-scale precursor and cathode material capacities and high-quality customers driving continuous volume expansion [1] - The company is expected to complete its transformation from a cyclical to a growth company, reducing profit cyclical fluctuations and gaining a significant advantage over peers [26]