The leader of copper processing industry, the scale effect helps to take off: the company is the leader of copper processing industry, the output of copper processing materials ranks first in the country, and the production capacity of copper products is expected to reach 2 million tons in 2022 and 2.5 million tons in 2025.
Scale effect helps to reduce the average cost of copper products, and the company continues to expand market share, increase market share and play a leading role by virtue of its low-cost advantage.
"Copper alloy material + magnetic material" two-wheel drive: magnetic materials are mainly used in motors, and the company's electromagnetic wire business has a strong synergistic effect. During the 13th five-year Plan period, the company's copper production grew at a compound growth rate of 18% (much higher than the 1.6% growth rate of the domestic industry). It is expected that copper production capacity will increase to 2.5 million tons in 2025, which is in line with the growth rate of about 18%. At present, the annual production capacity of rare earth permanent magnet materials is 5000 tons in Ningbo base. Baotou base plans to build a 8000 ton rare earth permanent magnet material project, which is divided into two phases and is expected to be put into production in 2023 and 2024 respectively. After it is put into production, it will be increased to 13000 tons.
Take advantage of the double-carbon wind to expand high-end application markets such as flat wire, high-precision copper strip and high-performance NdFeB: the company increases scientific and technological research and development and market development in new energy, wind power, photovoltaic and other fields. In the first half of 2021, the application of the company's copper products in key areas such as new energy vehicles, wind power, UHV and 5G exceeded 17500 tons, of which the sales of products used in the field of new energy vehicles increased by 94% compared with the same period last year. The sales of products used in the field of wind power generation increased by 52% compared with the same period last year, and the sales of products used in UHV increased by 20% compared with the same period last year.
Relying on 20 years of experience in the production and marketing of electromagnetic lines, the company pays close attention to the development opportunities of flat lines. At present, electromagnetic wire flat wire products have entered the supplier system of well-known new energy automobile enterprises, and have now entered the stage of mass production. In 2022, the production capacity of flat line for new energy will be expanded from 5000 tons to 20, 000 tons.
High-precision copper strip products have successfully entered the international well-known motor supplier system, applied to new energy vehicles, motors and other fields, and have now entered the stage of batch supply.
The high precision strip project for 5G communication soaking plate under research by the company is progressing smoothly, the key technologies have been broken through, and each index has basically reached the expected target.
Chromium-zirconium-copper alloy materials have been mass produced, and the products are used in high-tech fields such as resistance welding electrodes, high-speed iron contact wires and so on.
High-performance brass belt products have successfully entered the emerging lighting industry and white goods connector terminal supply chain.
After 20 years of experience, rare earth permanent magnet materials have improved their quality and expanded their capacity. at present, the annual production capacity of 5000 tons will reach 13000 tons in 2024.
Undervalued blue chip stocks: since the listing of the small and medium-sized board in 2015, the company's income has grown at a compound annual growth rate of 10.5%, gross profit at a compound growth rate of 26%, and gross profit margin has increased from 2.4% in 2015 to 4.08% in 2020. According to our estimates, the company expects net profit of 100.13 billion in 2022 and 2023, corresponding to a price-to-earnings ratio of 12 and 9 times.
Give a "highly recommended-A" investment rating.
Risk hints: the production schedule of the new expansion project is not as expected, the downstream consumption of products such as flat lines is lower than expected, the risk of sharp fluctuations in copper and rare earth prices in a short period of time, the risk of exchange rate fluctuations, and so on.