Main points of investment
Event: the company announced that the company achieved 57.45 billion yuan in revenue in the third quarter of 2022, + 16.0% year on year, 933 million yuan in net profit, 19.34 billion yuan in revenue in a single quarter,-1.0% / year-on-year + 18.2%, and 282 million yuan in net profit in the third quarter of 2022, compared with the same period last year.
Traditional business: short-term costs rise and disturb profitability, and the overall performance is in line with expectations. In terms of sales volume, although the hot weather this summer is good for air conditioning sales, the overall sales volume may decline slightly from the previous month as the economy at home and abroad is still weak. From a regional point of view, cost transmission in Europe has usually been relatively smooth, but persistently high energy prices since the third quarter, especially the surge in electricity costs, make it difficult to effectively transmit production costs, and Q3 may not perform well in Europe in a single quarter; in the domestic region, the company continues to maintain proactive strategic adjustments and continue to optimize its product and customer structure. In terms of profits, in the case of rising costs and proactive adjustment of sales volume, although the month-on-month profit per ton may have declined relatively, the resilience of the profit center per ton is still strong. In the context of the current global economic slowdown, compared with the industry, the company's fine cost control ability and anti-risk ability are relatively more outstanding.
New energy business: lithium copper foil is promoted in an orderly manner and is expected to achieve a production capacity of 25000 tons by the end of the year. The company has achieved a production capacity of 12500 tons in a workshop in mid-September 2022 and achieved the production of 4.5-8 micron lithium copper foil. At present, it has entered a stage of stable mass production, good feedback from the market and customers, and is currently speeding up production to meet order delivery. At present, the investment in fixed assets has reached 2.5 billion yuan, and the company expects to put 40,000 tons of capacity into production in three workshops before the Spring Festival, and is expected to build a capacity of 50,000 tons in the first quarter of 2023. We expect annual sales or contribution to a kiloton scale. We expect to increase the sales of lithium copper foil by 20,000 tons in 2023 and 2024, which is expected to significantly increase the performance and open the company's second growth curve.
Profit forecast and investment advice: while the company continues to reduce costs and increase efficiency by virtue of the new production line, the optimization of business structure helps to improve the profitability of traditional business, and the lithium copper foil project opens the second growth curve in the medium and long term. Under the current macro environment, the supply clearing of the copper tube industry is expected to accelerate and attach importance to the company's α + β investment opportunities. We estimate that the company's net profit from 2022-2024 will be 1.2707 billion yuan for 11.71x18.31xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Risk hints: global macroeconomic fluctuations increase risks; downstream demand slows; projects under construction are less than expected.