Sinosteel Group is collectively incorporated into China Baowu, and the actual controller of the company remains unchanged. On December 21, 2022, Sinosteel Tianyuan indirect controlling shareholder Sinosteel Group and China Baowu were reorganized, and Sinosteel as a whole was incorporated into China Baowu. After the completion of this transfer, Baowu of China will indirectly control 32.85% of the shares of the company through Sinosteel and achieve control over the company. The controlling shareholder of the company remains unchanged and remains Sinosteel Capital; the actual controller of the Company remains unchanged and remains the State-owned assets Supervision and Administration Commission of the State Council.
Industry coordination-resource support, Sinosteel Tianyuan is expected to usher in accelerated development. China Baowu has a strong resource allocation ability and a good customer base, which is expected to provide more resource support for the development of the company's magnetic materials business and testing business, and accelerate the development of the company. At the same time, China Baowu can provide iron red with high quality and more cost advantage than the market for Sinosteel Tianyuan ferrite, and industrial coordination will further build industry competitiveness.
Continue to expand the scope of business and service areas, testing business sustained high growth. With the "tube service"
With the deepening of the reform, China's inspection and testing market will show a momentum of rapid development. In the past five years, the compound growth rate is expected to reach 11.0%. In 2026, the market size is expected to exceed 700 billion yuan, of which the market size in the field of infrastructure testing is estimated to be about 150 billion yuan. The company is the only full license, national layout of infrastructure testing institutions, and continue to expand the scope of business and testing areas, actively explore the environment, EMC and electronics and other incremental markets to help the company's performance growth.
The demand for magnetic materials is strong, and the company's production capacity is expanding steadily. The company has a full range of magnetic materials and currently has an electronic grade manganese tetroxide production capacity of 50,000 tons, ranking first in China. The company is a battery-grade manganese tetroxide leader with an existing production capacity of 5000 tons. In order to meet the growth of downstream market demand, 10,000 tons of production capacity under construction will be put into production next year. In addition, the company has a production capacity of 20,000 tons of permanent magnetic ferrite devices, 5000 tons of soft magnetic devices and 2000 tons of rare earth permanent magnetic devices, and has an annual production capacity of 4000 tons of metal magnetic core and 4000 tons of metal soft magnetic powder under construction. The company's magnetic material production capacity is expanding rapidly, and the magnetic material business has high growth.
Investment suggestion: the company ploughs the magnetic material business for many years, and distributes soft magnetic, ferrite permanent magnet and rare earth permanent magnet at the same time, and is the absolute leader of manganese tetroxide; in the testing field, the company is the only fully licensed infrastructure testing organization with national layout. Domestic testing business is in the stage of rapid development, and the performance is expected to continue to grow at a high speed under the widening of testing scope and fields. From 2022 to 2024, the company's operating income is expected to reach 32.16,40.55 and 5.321 billion yuan, the return net profit is 3.52,4.76 and 631 million yuan respectively, and the EPS is 0.47,0.64,0.85 respectively. Maintain a "buy" rating.
Risk hints: the production capacity of magnetic materials is lower than expected; the demand for magnetic materials is weak; the price of raw materials is rising; the growth of testing business is not as expected.
