Sichuan Luqiao expected to start production of lithium battery project in 2020

Sichuan Luqiao expected to start production of lithium battery project in 2020

Sichuan Road and Bridge announced on the evening of May 9, they plans to set up a project company to build a "10,000 tons / year lithium battery ternary cathode material and 20,000 tons / year positive electrode material precursor project", construction period about 2 years and expected to 2020 put into production. The registered capital of Project Company is set at 800 million yuan, and initial investment is 500 million yuan.

The company subscribes for 440 million yuan of investment, and the initial investment is 275 million yuan, with a shareholding ratio of 55%. According to the company, the company has diversified its development around the main business resources on the premise of continuously consolidating and strengthening its main business. Previously, it has invested in highway invest operation projects, hydropower projects and mineral resources projects. The company's investment in lithium power projects mainly based on the future development prospects of the new energy materials industry, in line with national policies and industry orientation, and in line with the strategic development direction of the company's resource sector, which is conducive to the company's sustainable development. The company's current investment amount is small, and will not have a major impact on the company's main business, financial status and operating results. Sichuan Luqiao disclosed on the same day that the company's accumulated bid amount in the first four months of this year was about 35.134 billion yuan, and the total investment of PPP projects was about 6.183 billion yuan. According to company's quarterly report, the company's operating income from January to March 2018 was 4.93 billion yuan, up 19.0% year-on-year, net profit attributable to shareholders of listed companies was 120 million yuan, up 25.6% year-on-year; The net profit of non-recurring gains and losses of shareholders of listed companies was 110 million yuan, up 28.8% year-on-year; EPS was 0.0318 yuan. Everbright Securities believes that during the reporting period, the number of newly signed contracts increased by 3.9 times, and the scale of orders in hand reached 2.8 times of the previous year's construction.

During the reporting period, the company achieved a new contract value of 29.71 billion yuan, a year-on-year increase. 399%. The new single-digit growth rate further accelerated based on high base, indicating that the company has officially opened the third round of construction peak period, and strong order reserves expected to form a strong guarantee for future performance. We estimate that the company's orders in hand will be about 48.2 billion yuan by the end of 2017; after the new orders of 18Q1, the orders in hand are expected to exceed 70 billion yuan, 2.1 times the total revenue of 17 years and 2.8 times of the income from construction business.

At this stage, the company's orders have been best in history, future revenue and performance growth are more certain. In addition, in recent years, road investment has a high degree of prosperity. Sichuan's "13th Five-Year Plan" traffic investment increased by 22.6% year-on-year. The PPP model boosted the infrastructure blowout in the southwest region. The company is the core infrastructure platform of the Iron Investment Group and the third round of construction peak. It has already started. In the past two years, the number of new contracts has increased significantly. The overseas mining industry is progressing smoothly. The company is a leader in local infrastructure construction. The growth rate is in line with expectations and the valuation is low, and the margin of safety is high.

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