Copper processing leader, capacity performance exceeds the growth of the industry. Founded in 2017, the company is mainly engaged in copper processing (including copper strip, copper wire, copper bar, electromagnetic wire, copper bar and other products). The company's copper processing capacity is expected to expand to about 2 million tons in 2022, and the production capacity of 120000 tons of copper alloy strip is expected to be completed and put into production in 2024. The company's copper processing output GAGR=18.3%, from 2022 to 2021 is much higher than the industry average. The company's 2021 revenue of 81.159 billion yuan, year-on-year + 73.31%, return to the mother net profit of 741 million yuan, year-on-year + 44.70%, capacity performance rapid growth.
The processing fee model is not afraid of the price cycle, and the differentiation of the industry operating rate is obvious. The copper processing adopts the processing fee model, and the gross profit per ton of the company is less affected by the copper price. in recent years, the operating rate of different scale of the copper processing industry is obviously differentiated, and the company benefits from the industry differentiation as a large copper processing enterprise. The traditional areas of downstream demand will remain stable in the future. It is expected that the photovoltaic and wind power sectors will boost copper consumption by about 2 million tons in 2025, while new energy vehicles will boost copper consumption by 1.39 million tons. Copper processing costs will rise steadily in the future.
We will increase the production capacity of 20,000 tons of flat lines and actively distribute the new demand for 800V high-voltage flat lines. The production capacity of 20,000 tons flat line will be completed in 2022, and the raw material oxygen-free copper rod will be produced by the company to improve its cost control ability; 800V platform puts forward higher requirements for corona resistance of flat line, and the company has arranged high-voltage flat line business. Compared with round line motor, flat line motor has performance advantages in new energy vehicles. It is predicted that the global demand for flat line of new energy vehicles will be 225100 tons by 2025, the market size will be 14.182 billion yuan, and the market demand for GAGR=39.02%, from 2020 to 2025 will be strong. The contribution of flat line business to future performance growth is gradually increasing.
Permanent magnet industry veteran, expand the production of 8000 tons of high-performance permanent magnet materials. The company has laid out NdFeB materials for 21 years, with complete brands and mature technology. the company currently has a production capacity of 5000 tons, mainly in the fields of wind power generation, new energy vehicles, industrial motors, consumer electronics and medical devices. as the company's high gross margin products will be put into production in 2023 and 2024 Baotou Phase I, Phase II high-performance NdFeB permanent magnet material is expected to produce a total of 13000 tons. High-performance NdFeB permanent magnet materials are driven by new energy vehicles, wind power, frequency conversion air conditioners, consumer electronics and industrial energy-saving motors. It is predicted that the global demand for high-performance NdFeB materials will be 204700 tons by 2025, and the exuberant GAGR=25.79%, demand will double and expand production from 2020 to 2025. NdFeB business profits are expected to grow rapidly.
Investment advice: with the release of the company's high-end production capacity, copper processing materials sales will grow steadily, NdFeB magnetic materials put into production, it is predicted that the company's 22-24 year revenue is 1015.14 yuan, 1080.73 yuan, 111.44 billion yuan respectively; return to the mother net profit is 9.60,11.91,1.31 billion yuan respectively; corresponding to 22-24 years PE11.20, 9.02,8.20 times, the first coverage to give the company a "buy" rating.
Risk hint: copper processing output is not as expected; flat wire output is not as expected; competition in NdFeB industry is intensified.