Event: the board of directors examined and approved the "proposal on the cooperative construction of 200000 tons of high-grade lithium copper foil project", the main construction body is Gansu Defu New Materials Co., Ltd., Baiyin Nonferrous holding 37%.
The total investment of the project is about 12.15 billion yuan, and the main products are 4.5 μ m and 6 μ m electrolytic copper foil for lithium batteries.
According to the preliminary estimate that the project capital accounts for 35% of the total investment, Baiyin Nonferrous contributes about 1.57 billion yuan according to the proportion of its shareholding. After the early consideration and decision of the company's board of directors, the 200000 / year high-grade electrolytic copper foil project was built in stages, of which the first phase of the project was completed and put into production in October 2019, and another 30,000 tons of production capacity will be formed by the end of 2021. In October 2021, the company has started the construction of a 40,000-ton project, which is scheduled to be completed and put into production by the end of 2022. At that time, the company's annual production capacity of electrolytic copper foil will reach 70,000 tons, which is in the forefront of the country. In the follow-up, another 130000 tons of production line will be built, and the overall construction of 200000 tons of high-grade electrolytic copper foil project is planned to be completed in 2025.
Advanced equipment, leading technology research and development industry. The project company has a rich patent reserve, which provides a solid foundation for the research and development of new products and the improvement of existing processes. After the improvement of its core equipment, it can achieve stable production of high-performance copper foil for a long time, which is unique in the domestic copper foil industry.
Excavate the location advantage, the ability to control cost is outstanding. The company cooperates to build 200000 tons of high-grade electrolytic copper foil project is located in the northwest, the cost of production factors is relatively low in the Yangtze River Delta, Pearl River Delta and other coastal developed areas. Relatively low human resources costs, land costs, management costs, etc., make the company's products finally occupy an advantage in the market competition.
It has a production capacity of 200,000 tons of cathode copper per year and has a significant advantage in raw material supply. Baiyin Nonferrous is an important copper production enterprise in China, with an annual production capacity of 200000 tons of cathode copper. The company's cathode copper products are widely used in electrical, light industry, machinery manufacturing, construction industry and other fields. Downstream customers and enterprises further process the cathode copper to form copper foil, copper rod, copper wire, copper plate and other deep processing products. Silver non-ferrous copper raw materials have significant advantages, which can provide raw material supply guarantee for high-grade electrolytic copper foil projects, and a stable supply chain has laid a solid foundation for project construction.
Maintain the "prudent recommendation-A" investment rating. Electrolytic copper foil has a vast market in China. Electrolytic copper foil can not be separated from the "new infrastructure" industries such as 5G base stations, railway and rail transit, new energy vehicles, large data centers and so on.
The huge space of the downstream market will lead to the rapid growth of the demand for electrolytic copper foil. From January to September in 2021, the company has produced 9527 tons of all kinds of copper foil, realizing sales income of 907 million yuan and profit of 159 million yuan.
The company's profitability is expected to improve significantly with the help of 200,000 tons / year high-grade electrolytic copper foil project, and is expected to achieve a net profit of 80 / 119 / 151 million yuan in 2021-2023, corresponding to a price-to-earnings ratio of 285 / 192,151 times, maintaining the "prudent recommendation-A" investment rating.
Risk tips: demand is lower than expected, raw material prices fluctuate sharply, company operating risks, project construction schedule is not as expected, short-term stock price fluctuations, etc.