Items:
On August 30, the company announced that it would invest 1.2 billion yuan in the new 24000-ton high-performance electronic copper foil production base project, with a total investment of 1.2 billion yuan. It is mainly engaged in the research, development, production and sales of new composite materials, with a registered capital of 300 million yuan.
Comments:
Join hands with Yueda Automobile to expand the market and optimize the customer channel of lithium copper foil. The company plans to set up a holding subsidiary Zhongyi Yueda with Jiangsu Yueda Automobile Group (90% of the company and 10% of Yueda Automobile), and will invest in a new 24000-ton high-performance electronic copper foil project (lithium copper foil) in Yancheng, Jiangsu Province. This investment project is the actual landing of the company's original production capacity planning. Yueda Motors has a good cooperative relationship with the company. In the company's IPO phase, it participates 1.82% of the company through strategic placement. This joint venture project will speed up the company's capacity construction of lithium, electricity and copper foil, and expand customer channels with the help of Yueda Automobile's years of accumulation in the automotive industry.
Composite copper foil improves product layout and enhances long-term competitiveness. The company invested in the establishment of Wuhan No. 1, in advance plans to build an annual output of 5 million square meters of composite copper foil production line, using magnetron sputtering + electroplating two-step process.
The difference between composite copper foil and electrolytic copper foil mainly lies in the magnetron sputtering process, while the principle and process of electroplating process is basically the same as that of electrolytic copper foil (PCB copper foil). The core technology of No.1 technology in the additive, process, process control and equipment of collective fluid electroless plating can be applied to the production of composite copper foil to improve the yield and production efficiency. In addition, compared with cross-border composite copper foil enterprises, electrolytic copper foil enterprises have more advantages in the cognitive accumulation of lithium customers and current collector products.
The second half of the year will enter the production capacity release period. The company's 22H1 output is 15000 tons, capacity utilization is 121.37%, and 13.09pcts is higher than the same period last year. As the additional 5000 tons of capacity was put into production in June (capacity climbing takes about a month), the contribution of performance in the first half of the year mainly depends on overproduction, while the second half of the year will enter the stage of capacity release. It is expected that 6500 tons will be put into production in September and December, and 42500 tons of capacity will be completed by the end of 22. At present, the company has a total planned production capacity of 79500 tons and is expected to put into production in mid-2023. The new production capacity of 24000 tons in Yancheng assumes that 12000 tons will be completed by the end of 23, then the company will have a production capacity of 67500 tons by the end of 23.
Investment suggestion: Zhongyi science and technology master copper foil manufacturing knowhow, using domestic equipment to expand production quickly, low depreciation cost and high production efficiency, and obvious processing cost advantage; in terms of customers, the company is one of the main suppliers of the world's largest battery enterprises in Ningde era, and future shipments are guaranteed. With the release of production capacity, the company's performance is expected to rise steadily. We estimate that the company's 2022-2024 revenue will be 46.5 million RMB 7.35 billion yuan, and the net profit of return to the parent will be 4.8 Universe 7.8 Plus 12.6 billion yuan, corresponding to the corresponding EPS of 4.8 Universe 7.7 Plus 12.4 yuan. With reference to comparable company valuations, we give 23-year results 18 times PE, with a target price of 138.9 yuan, maintaining a "strong push" rating.
Risk hints: sales of new energy vehicles fall short of expectations; acceleration of industry expansion leads to intensified competition; and new technology advances squeeze the traditional lithium copper foil market more than expected.
