Items:
The company released the third-quarter report that the revenue in the first three quarters of 2022 was 2.1 billion yuan, + 38.0% compared with the same period last year, and the net profit returned to the mother was 310 million yuan, + 7.9% compared with the same period last year, deducting the non-return net profit of 280 million yuan,-0.3% year on year. Among them, the company Q3 achieved revenue of 690 million yuan in a single quarter, + 23.1% from the same period last year,-2.0% from the previous year, 80 million yuan from the same period last year,-10.0% from the same period last year,-28.7% from the previous quarter, and 70 million yuan from the same period last year,-20.3% from the same period last year, and-30.2% from the previous year.
Comments:
Shipments continued to rise from the previous month, and the decline in revenue was mainly due to the disturbance of the decline in copper prices. The company put into production 5000 tons of capacity in June. After considering the capacity climbing, Q3 is expected to contribute about 600t, and the overall shipment volume of Q3 is about 9% higher than that of Q2. And Q3 revenue fell slightly 2.0% month-on-month, mainly due to a significant decline in copper prices, Q3 Yangtze River non-ferrous copper prices fell 0.9600 yuan / ton (after tax), under the "copper price + processing fee" pricing model, the decline in copper prices will lead to a certain decline in the company's revenue scale.
Multiple factors lead to short-term pressure on Q3 profits. The company's Q3 gross profit margin is 16.1%, quarter-on-6.9pcts, return-to-home net profit rate of 12.0%, month-on-4.5pcts. We believe that the main reasons for the pressure on performance are: the decline in processing fees on the revenue side of ①, referring to Baichuan Yingfu data, standard copper foil due to the downturn in the consumer electronics market, Q3 processing fees fell by an average of 600,000 yuan / ton (after tax, 18 μ m), lithium copper foil Q3 processing fees also fell by an average of 0.46 million yuan / ton from the high point due to supply relief (after tax, 6 μ m). The cost side of ② has increased in the short term, mainly due to the fact that the company put into production of 5000 tons of new capacity in September, resulting in an increase in depreciation costs due to capacity climbing. In addition, there was a brief shortage of electricity in August in Hubei Province, which slightly affected the company's full capacity production.
Look forward to capacity release and development of composite copper foil. In terms of electrolytic copper foil, the company has planned a production capacity of 79500 tons, and 22H2 has entered the production capacity release period. It is expected that 22xpx will be completed by the end of the year, with 675 tons, which is 58.8% higher than that of the same period last year. In terms of composite copper foil, the company has invested in the establishment of Wuhan No. 1, with an annual output of 5 million square meters of composite copper foil production line, which is expected to be put into production in the second half of 23.
Investment suggestion: middle one science and technology master copper foil manufacturing knowhow, using domestic equipment to expand production quickly, low depreciation cost and high production efficiency, 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. Taking into account the downturn in the consumer electronics market, the continuous decline in standard copper foil processing fees, and the decline in lithium copper foil processing fees from highs, we lowered the company's 22-24 return net profit forecast to 4.3x73pm 1.13 billion yuan respectively, corresponding to EPS 4.3pm 7.2pm 11.1 yuan (previously predicted to be 4.8mm 7.7pm 12.4 yuan respectively), corresponding to the current market capitalization PE is respectively 16-9-6 times With reference to the comparable company's valuation, it is given a 23-year performance of 15 times PE, with a target price of 107.8 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.
