Report guide
On April 20, 2022, the company released the annual report of 2021 and the quarterly report of 2022: the operating income in 2021 was 88.159 billion yuan, an increase of 73.31% over the same period last year; the return net profit was 741 million yuan, an increase of 44.70% over the same period last year; deducting the non-return net profit was 690 million yuan, an increase of 11.48% over the same period last year.
In the first quarter of 2022, the operating income was 21.42 billion yuan, an increase of 36.44% over the same period last year; the net profit returned to the mother was 134 million yuan, up 32.05% over the same period last year; and the net profit deducted from non-return was 108 million yuan, down 45.61% from the same period last year.
Main points of investment
The new projects are progressing smoothly, with an output of 1.51 million tons, a year-on-year increase of 9.93%. 2021 is the year for the company to rapidly promote new projects: (1) Guangdong base "350,000 tons / year high strength, high conductivity and high toughness copper wire project", "20,000 tons / year new energy vehicle and high efficiency motor special electromagnetic wire project" and "20,000 tons / year special-shaped precision copper bar project" was put into production. (2) the construction of Chongqing base is progressing smoothly and has been put into production in the first quarter of 2022. (3) the Ningbo base is advancing rapidly. The "annual output of 80,000 tons of hot rolled copper strip project" will be put into production in the first quarter of 2022, and the "annual output of 50,000 tons of high-strength and high-conductivity copper alloy bar and wire project" is expected to be put into production this year.
The total output of copper and copper alloy materials for the whole year was 1.5129 million tons (including 679300 tons of copper wire row and 833600 tons of other copper processing products), and 1.3322 million tons of foreign sales (including 562100 tons of copper wire row and 770,200 tons of other copper processing products), all of which reached a record high.
The net profit of magnetic material plate increased by 98.19% over the same period last year, which is an important growth point in 2021. In mid-2021, the outbreak of new energy vehicles and wind power installation led to the rapid growth of magnetic material demand. The company has two magnetic material production bases in Ningbo and Baotou. Is one of the domestic enterprises with high technical level and complete product range. In 2021, the operating income of the wholly-owned subsidiary Ketian Magnetic Industry was 1.111 billion yuan, and the net profit was 136 million yuan, an increase of 98.19% over the same period last year. The proportion of the total net profit belonging to listed companies increased from 16% to 21%. The net profit increment of Ketian Magnetic Industry accounts for 29% of the company's parent net profit increment, which is an important growth point in 2021.
The rising copper price superimposed company is in a "growth pain period", which is a drag on cash flow and is expected to improve after the release of production capacity.
According to the quotation of Changjiang Nonferrous, the average copper price reached 68407 yuan / ton in 2021 and only 48898 yuan / ton in 2020, an increase of about 40% over the same period last year. The company's main business is copper processing, whether it is raw materials, products in process or finished products. The sharp rise in copper prices takes up more obvious liquidity of the company. On the other hand, the company has more projects under construction, production capacity is gradually released, account period factors lead to new orders often need to increase the investment of liquidity, a drag on cash flow. When the new capacity is fully released, the cash flow situation will improve.
The new energy process drives the demand for copper products, and the company as a copper processing leader is expected to continue to benefit. According to the International Copper Association, a pure electric car needs at least 83kg copper products, while traditional fuel passenger cars only need about 20kg. The copper demand of new energy vehicles is greatly increased. The new energy process will create new growth points for copper demand. The company takes the initiative to meet the electric trend: (1) the new energy vehicle drive motor winding flat wire has achieved mass production, and plans to increase the annual production capacity of new energy flat wire products to 20,000 tons in 2022; at the same time, the active layout of 800V high voltage electromagnetic flat wire technology research and development, has been certified by some car companies. In addition, high-precision copper strips for new energy motor cooling modules, copper bars and oxygen-free copper strips for IGBT have been mass-produced or certified. As the leader of copper processing, the company is expected to undertake the new demand for high-end copper products in the field of new energy.
Profit forecast and valuation
The company is expected to achieve a net profit of 904 million yuan, 1.19 billion yuan and 1.334 billion yuan from 2022 to 2024, an increase of 22.02%, 31.61% and 12.11% over the same period last year, corresponding to 12.24,9.30,8.30 times of PE, maintaining the "buy" rating.