occurrences

The company announced its 2023 performance forecast. Net profit due to mother in 2023 was 50,000-550 million yuan, up 274.06%-311.47% year-on-year, deducted non-net profit of 38-430 million yuan, and net profit deducted for the same period last year was 63.48 million yuan.

reviews

The full-year results forecast is impressive, with significant improvements in Q4. According to the performance forecast, the 2023Q4 net profit of the company is expected to be 155-205 million yuan, up 360.7%-509.6% year on year and 17.3% -55.2% month on month. 2023Q4 deducted non-net profit of 312-362 million yuan, an increase of 439.8%-526.4% over the same period last year. Non-net profit deducted for the same period last year was -17.32 million yuan, and the performance improvement was very impressive.

The copper-based business grew steadily and reached a scale of 1 million tons in 2025. In 2023, the company's copper-based materials sector relied on scale and cost advantages, customer recognition and market share continued to increase, and business scale continued to grow. At the same time, the market gradually picked up, product processing costs increased, and profitability further recovered. By the end of the 14th Five-Year Plan, the company plans to have a production capacity of more than 1 million tons of copper-based materials, including 400,000 tons of precision copper strips, 500,000 tons of copper conductor materials, and 100,000 tons of copper alloy wire. At the same time, the company is also laying out high-end fields, speeding up the construction of projects such as “50,000 tons of high-precision copper alloy strips and foils per year” to help expand products into high-precision fields.

The military materials business has blossomed a lot and ushered in full expansion. The company's military carbon materials sector maintained a good growth trend in 2023. With the completion and commissioning of the tantalum carbide project, the subsidiary Hunan Dingli Technology has achieved small-batch production of high-purity toner, and its business scale and performance have increased rapidly; in terms of metal-based 3D printing materials and products, 3D printed structural parts have already been delivered in batches. On December 20, 2023, Dingli Technology was officially listed on the New Third Board. After listing, it can promote Dingli's business development, which is conducive to maximizing the overall benefits of Chujiang New Materials.

Jiangsu Tianniao Hi-Tech has sufficient orders and stable performance. The first phase of the Wuhu Tianniao project was completed and put into operation at the end of 2022, and production capacity was climbing in the first three quarters of 2023. The production and sales volume of thermal field composites is expected to be over 600 tons in 2023; samples of carbon ceramic brake discs have been delivered, and products are planned to be produced within 2023. Carbon fiber preforms, one of the leading products of Tiantao Hi-Tech, are mainly used to prepare carbon/carbon and carbon/ceramic composites. They have been supplied in batches to the domestic civil aviation regional aircraft ARJ21 and exclusively supplied to the domestic large aircraft C919, which is of great strategic importance to the development of aerospace, defense, and military industries.

Profit forecasting

We expect the company's net profit to be $519/7.20/936 million yuan in 2023-2025, corresponding EPS of 0.39/0.54/0.70 yuan, and PE of 17.12/12.34/9.50 times. Maintain a “buy” rating.

Risk warning:

Raw material prices fluctuated greatly, industry policies changed, project progress fell short of expectations, and downstream demand fell short of expectations.