Main points of investment
The company specializes in copper processing and is one of the most complete enterprises in the domestic industry chain integrating recycled copper smelting, copper processing and copper deep processing. at present, it has an annual production capacity of 80,000 tons of cathode copper, 439000 tons of copper wire (row), 227800 tons of copper rod and 152700 tons of copper tube. copper plate and strip 110000 tons, electromagnetic wire 97500 tons. The company also operates magnetic materials business, and Ketian Magnetic Industry has a production capacity of 3000 tons of sintered NdFeB products. In recent years, the company's copper processing capacity has continued to expand, and the overall growth of production and marketing scale has led to performance growth.
Industry: copper price floor waiting for demand improvement, magnetic materials benefit from new energy demand pull. ① copper: global pricing, demand and global economic growth are highly related, short-term impact of global public health events, economic activity shut down, demand weakening, triggered fears of a global economic recession, prices fell rapidly.
On the cost side, the copper price falls below the 90th C1+Capex cost line, the bottom support is clear, and the price is bottomed out.
Driven by the increase in domestic power grid investment and the improvement of real estate completion, copper domestic demand repair has a strong certainty, overseas to ease the epidemic, demand is also expected to stabilize and repair. ② NdFeB: China is the world's largest producer of NdFeB magnetic materials, but the supply of high-performance magnetic materials is insufficient. The downstream demand of high-performance NdFeB magnetic materials is mainly in the field of wind power generation and consumer electronics, and new energy vehicles are the largest marginal increment.
Competitive advantage: leading scale, whole industry chain, diversified layout. ① adheres to the spirit of craftsmen, focuses on becoming bigger, stronger, and becoming the main business of refined copper processing, establishing a leading position in the industry scale, and one of the makers of the main standards of the copper processing industry; ② copper processing business integrates recycled copper smelting, copper processing and copper deep processing, while developing magnetic materials business, which helps to enhance the added value of products and disperse risks. ③ years of brand precipitation so that the company has been recognized by downstream high-quality customers, thus establishing a long-term and stable cooperative relationship.
The company intends to raise funds for the project with an annual output of 40,000 tons of high-precision copper alloy strip, 30,000 tons of high-purity and low-oxygen copper strands for special cables, 350000 tons of high-conductivity and high-toughness copper wire, 50,000 tons of high-precision electronic copper strips, etc., to expand copper processing capacity and enhance the added value of products.
Profit forecast: it is estimated that the return net profit of the company from 2020 to 2022 is 5.47,6.76 and 856 million yuan respectively, and the EPS is 0.38,0.46,0.59 yuan respectively. Coverage for the first time, giving the company a "prudent overweight" rating.
Risk hints: downstream demand is low; copper prices fluctuate sharply; increased trade frictions affect the company's import of raw materials and exports of finished products; and the construction progress of fund-raising projects is not as expected.