Fujian state-owned enterprises focus on the three major industries of tungsten and molybdenum, rare earths, and new energy materials. They maintain the “increase in holdings” rating companies as Fujian state-owned enterprises. The main business focuses on tungsten and molybdenum, rare earths, and new energy materials. The company released its 23-year performance report, achieving revenue of 39.420 billion yuan (yoy -18.25%) and net profit of 1,599 billion yuan (yoy +10.57%) in 23. Among them, the tungsten and molybdenum sector improved overall, mainly due to continued growth in production, sales and profits of deep-processing products; the rare earth and new energy materials industries were under pressure, and profits narrowed. We expect the company's net profit to be 1,819/2,293 billion yuan in 24-25, which is comparable to the company's PE (24E) average of 16.8X, giving the company a 24-year PE valuation of 16.8X, corresponding to the target price of 21.6 yuan, maintaining the “gain” rating.
Tungsten and molybdenum: Mining volume can be expected to increase, and profits from back-end cutting tools and photovoltaic tungsten wire may continue to grow significantly. The company's tungsten and molybdenum business is the company's core business, accounting for 80% of total profit in 23 years. On the mining side, the company can expect to increase its volume in the medium term: the output of tungsten ore is about 7,000-8,000 tons (WO3 100%), and the Yumapo tungsten and molybdenum mine under construction plans to increase production by 2,000 tons. The Group still has several tungsten mines in the incubation stage. In terms of deep processing, the company's profits for cutting tools and photovoltaic tungsten wire products may continue to grow significantly: production capacity of 10 million rotatable blades and 2.1 million pieces of cutting tools has been gradually put into operation, and the refinancing and fundraising project has further laid out 2 million complete tools, 30 million rotatable blades, 1.7 million pieces of superhard tools, and the company has been deeply involved in the middle and high-end and has achieved great results; the company's sales volume of fine tungsten wire in 23 years has reached 86.8 billion meters (yoy +219%). Increased amount of contributions.
Rare earths: join hands with China's rare earths to lay out the entire rare earth industry chain
The company carried out rare earth mining and smelting and separation business through cooperation: on September 23, 23, the company signed a “Cooperation Framework Agreement” with China Rare Earth and established a joint venture “Zhongxia Tungsten” to host the Changting Zhongfang rare earth mine; the company's holding subsidiary Jinlong Rare Earth will establish a joint venture with it to establish a “China Rare Earth Dragon” to be responsible for the company's original rare earth smelting and separation business; the company also established a joint venture with Chifeng Gold, Chijinxia Tungsten to develop rare earth resources in Laos. The company continues to develop deep-processing products: The company currently has a magnetic material production capacity of 12,000 tons. After the 5,000 ton project of high-performance rare earth permanent magnet materials for energy-saving motors is put into operation, the company's magnetic material production capacity will reach 17,000 tons.
New Energy Materials: Advancing courageously around the Xiamen Tungsten New Energy Exhibition
The company's new energy materials business operator, Xiamen Tungsten Xinneng, was listed in 22. It is one of the leading companies in the lithium cobalt oxide and ternary materials industry, and is also steadily promoting the lithium iron phosphate layout: Xia Tungsten Xinneng sold 71,500 tons of lithium cobaltate+ternary materials in 23 years, gradually releasing production capacity as Haijing and Ningde bases gradually built a total of 115,000 tons of ternary materials, and the 100,000 ton lithium iron phosphate project of Ya'an Xinneng was completed in stages. With Europe as the first stop in the global layout, Xiamen Tungsten Xinneng announced in September 23 that it plans to establish a joint venture for cathode materials, Xia Tungsten Xinneng, and plans to build a 40,000 ton ternary materials project. Furthermore, Xiamen Tungsten New Energy has proactively laid out hydrogen energy materials.
Risk warning: The company's cutting tools and photovoltaic tungsten wire emissions fell short of expectations, the price of tungsten concentrate was lower than expected, and the sales price of the company's rare earth and new energy materials products exceeded expectations under pressure.