Copper pipe is the global leader, with steady growth in production and sales. The company is mainly engaged in copper processing business, and the sales volume of copper products has grown at a compound rate of 15.4% in the past five years. Among them, copper tubes are the main products, accounting for 68% of the copper processing business in 21 years. The company has become the leader of copper pipe in the world, and we estimate that the domestic market share of copper pipe in 21 years is about 21%.
Copper tube industry: pattern optimization, bottom profit. 75% of the downstream copper tubes are used in the refrigeration industry, of which air conditioning drives the main demand. After the domestic air-conditioning production and sales peaked in 19 years, due to the impact of the epidemic, real estate policy adjustment, industry destocking and other factors, consumption was relatively low, resulting in intensified competition in the upstream copper tube industry, and processing fees experienced a significant decline. There is a significant difference in the operating rate of large, small and medium-sized enterprises, and it is expected that the industry has experienced a round of clearing, and the competition pattern has been optimized.
Copper processing business: growth driven by volume increase + cost reduction. 1) capacity expansion: the company continues to expand domestic and foreign production capacity through self-construction and acquisition, with a planned production and sales volume of 2.28 million tons in the past 25 years, including 1.23 million tons of copper tubes, with a target compound growth rate of 26% for copper production and sales in 21-25.
2) cost optimization: the company's five-generation continuous casting and rolling precision copper pipe production line has been evaluated by China Nonferrous Metals Industry Association "International leading level", and the comprehensive cost can be reduced by 700 yuan / ton.
At present, the company has promoted the comprehensive application of the intelligent and efficient manufacturing technology, and plans to phase out, transform and upgrade the copper pipe production lines that have been built, under construction and newly built before the end of the 24th.
After the completion of the transformation, the cost of copper tubes per ton will be significantly optimized.
Cut into the lithium copper foil and open the second growth curve. Lithium copper foil is used for negative current collector of lithium battery, and it is estimated that the compound growth rate of global demand in 22-25 years is about 27%. The company plans to build 150000 tons of copper foil production capacity, up to the current phase of a step-by-step capacity of 12500 tons has been put into production, to achieve 4.5-8 micron copper foil scale mass production. The company has established business contact with domestic mainstream downstream battery customers to speed up the promotion of product certification and introduction. It is estimated that as the lithium copper foil project is put into production in stages, the company's lithium copper foil will achieve an income of 100 million yuan in 3-37-73. Due to the large increase in lithium copper foil production capacity in recent years, there is a slight surplus in the industry in 23-24, which intensifies competition to a certain extent. It is expected that the company's product unit profitability will decline, and the company will achieve profit growth through volume premium.
The price of copper is relatively stable and has little disturbance to the company's earnings. The company's products adopt the copper price + processing fee pricing model, when the copper price fluctuates sharply, the company's profit may be disturbed, and the copper price in 23-24 years may maintain a high level in the game between fundamentals and financial aspects, which has little disturbance to the company's profit.
Profit Forecast & Investment suggestion
It is predicted that in 22-24, the company's net profit of returning to the parent will be 1.78 billion yuan, 1.77 billion yuan and 2.33 billion yuan, respectively, compared with the same period last year. The year-on-year + 6.3% PE will be 50.6% and 31.2%, respectively, and the realized PE will be 0.60, 0.90 and 1.18 yuan, respectively, and the corresponding PE will be times higher than that in 19-13-10. Give a 23-year 15-fold valuation with a target price of 13.82 yuan per share, giving a "buy" rating for the first time.
Risk hint
Project schedule is not as expected, copper price fluctuation, technology iteration, demand is not as expected, RMB exchange rate fluctuation.