The company focuses on the segmentation of copper alloy materials, and continues to explore high-end application scenarios for alloys such as copper chrome and copper and tungsten. Emerging fields such as liquid rocket engines, optical module chips, and CT and DR tubes have opened up the company's growth ceiling, showing strong development potential.
High-strength and high-conductivity copper alloys: With the rise of emerging fields, the market space is vast. The company produces and sells copper alloy ingots and products. The downstream of ingots is mainly connectors and lead frames, and the products are the main components of traction motors for rail transit vehicles. They are gradually expanding into emerging fields such as liquid rocket engine combustion interior wall materials. Satellite Internet construction has entered the fast track, which will greatly stimulate demand for rocket launches. Central enterprises represented by Plant 7103 and private commercial airlines represented by Blue Rocket Aerospace and Star Honor have all achieved new breakthroughs in liquid rockets, and the future space is vast.
Medium and high voltage electrical contact materials: domestic leaders, energy pattern optimization and rail transit construction provide development soil.
Under the trend of replacing traditional energy with the geographical demand for energy supply and demand for new energy, investment in power engineering and power grid construction is expected to continue to increase, driving a new round of demand expansion for medium and high voltage electrical contact materials and products.
The company's product is the single champion product of the Ministry of Industry and Information Technology, with a domestic market share of more than 60%.
High-performance metallic chromium powder: Aerospace stimulates demand for upstream materials. Chromium is an important additive to high temperature alloys. Downstream is mainly used in aerospace and other fields, and is also a key material for preparing chromium targets. Downstream applications of targets are concentrated in fields such as photovoltaic cells and semiconductors.
CT and DR tubes: The future market prospects are promising under the trend of localization. The per capita ownership of the domestic CT equipment market still lags behind that of developed countries, and market ownership is expected to maintain a high growth rate. The total share of the three foreign brands GE, Siemens, and Philips is 49.4%, and there is still a lot of room for development in the localization rate.
The company is one of the few domestic companies that can supply CT tubes and DR ball tube components. It has achieved stable batch supply to Siemens, and has gradually achieved supply to leading domestic companies such as Shanghai Lianying and Kunshan Yiyuan.
Optical module chip base: High computing power spawns high-performance copper alloy applications. Tungsten-copper alloys with different components can meet the requirements of 400G, 800G, and 1.6T optical modules. Optical modules larger than 1.6T require copper and diamond materials with better performance to meet the requirements. The company has already achieved small-batch supply, and production capacity is still under construction. Major customers include Finisar, Tianfu Communications, Global Radio and Television, and Dongguan Xintao, etc., and plans to continue building a manufacturing capacity of 2 million pieces per year in 2023.
It was covered for the first time, and an investment rating of “increased holdings” was given. It is estimated that the net profit of the company from 2023-2025 will be 1.0, 140 million yuan, and 180 million yuan respectively, and the corresponding PE will be 76, 54, and 41 times, respectively.
Risk warning: technology upgrade and R&D risk, cost increase risk, market uncertainty risk, industry risk, exchange rate fluctuation risk, macroeconomic environment change risk, etc.