Report summary:
The company's performance grew steadily, and gross margin increased slightly. In 2023Q1-Q3, the company achieved revenue of 869 million yuan, an increase of 21.02% over the previous year; realized net profit of 68 million yuan, an increase of 17.25% over the previous year, and maintained a steady growth trend in performance. Judging from financial indicators, the company's 2023Q1-Q3 gross margin was 20.23%, +1.54pct year on year; net profit margin was 7.88%, y-0.25pct year on year.
The company's business is arranged in multiple fields. The company is committed to becoming a leading enterprise in new materials in various segments in China. The company is mainly engaged in R&D and manufacturing of copper-chromium-based alloys, with this as the core, expanding technology to various related industries. Currently, the company's main products include high-strength high-conductivity copper alloy materials and products, medium and high voltage electrical contact materials and products, high-performance metal chrome powder, CT and DR ball tube components, next-generation copper-iron alloy materials, optical module chip bases, and liquid rocket engine thrust interior walls.
Business technology has blossomed a lot. Since 2023, the company has made major technological breakthroughs in several businesses. 1) High-strength high-conductivity copper alloy materials and products: The 8-ton atmospheric protection melting process successfully developed a variety of high-strength high-conductivity copper alloy materials. 2) Medium and high voltage electrical contact materials and products: Realize the technical optimization of 72.5kV-126kV high-voltage grade CuCr50-CuCr55 materials. 3) CT and DR ball tube components: Successful optimization of the 3MHU series CT ball tube rotor component manufacturing process, and successful optimization of the high heat capacity 5MHUCT ball tube rotor component processing process and welding process. 4) Optical module chip base materials: Develop 3DP printing tungsten blank+vacuum copper penetration process, and develop optical module base heat dissipation materials with higher heat dissipation performance. 5) Liquid rocket engine thrust interior walls: Develop CuRnB materials and preparation technology for next-generation liquid rocket engine thrust interior walls and produce them in small batches.
Deeply cultivate the main business and steadily release production capacity to create a supply advantage. 1) Fund-raising projects are progressing steadily. As of the end of 2023H1, the cumulative investment progress of fund-raising funds is 96.37%. The main production equipment has basically been put into operation, and some equipment has been tested in production. 2) The company's CT and DR ball tube components have built a production capacity of 6,000-8000 sets, and the autonomous controllability of key components in the medical equipment industry chain has been further consolidated.
Significant progress has been made in the localization of CT tubes, and the prototyping of some customer products has entered the mass production stage. 3) The company's liquid rocket engine thrust interior wall products have entered the mass production stage, and has built 50-100 sets of finished product processing capacity. Currently, it is the only R&D and manufacturing enterprise in China with the ability to supply everything from materials to finished parts. 4) The company extends the core preparation technology of tungsten copper alloy materials to optical module chip base materials, lays out new digital infrastructure fields, and supports the rapid development of the optical communication industry to 400G, 800G and 1.6T.
Investment suggestions: We expect the company's revenue for 2023-2025 to be 1,289/16.98/2.122 billion yuan, net profit of 1.13/1.60/220 million yuan, corresponding EPS of 0.20/0.29/0.39 yuan, corresponding to PE67.53/47.57/34.58X. First coverage, giving a “buy” rating.
Risk warning: raw material prices fluctuate, demand falls, and performance and valuation decisions fall short of expectations.