Key points of investment
Incident: The company released its 2023 annual report, and profit improved year over year. In 2023, the company's revenue was 110.50 billion yuan, +9.2% year on year; net profit to mother was 527 million yuan, +25.37% year on year; net profit without return to mother was 377 million yuan, +104.93% year over year. The company's profit grew rapidly year over year.
In 2023, the company's production and sales scale of copper processing products reached a record high, and sales of new energy products increased. In 2023, the company achieved a total production volume of copper and copper alloy materials of 1.912,200 tons, an increase of 9.38% year on year; external sales volume of 1.8555 million tons, an increase of 15.22% year on year, and the scale of production and sales reached a record high. The company's sales volume of copper products used in the fields of new energy vehicles, photovoltaics, wind power and other fields increased to 184,900 tons, maintaining a year-on-year growth trend.
In 2023, the company has delivered 800V high-voltage flat wire in batches, and is steadily advancing the construction of 40,000 tons/year flat wire production capacity, and preparations are being made to build a flat wire production capacity at the Vietnam base. In 2023, the company's new energy electromagnetic flat wire has formed a production capacity of 20,000 tons. The construction of the “electromagnetic flat wire project with an annual output of 40,000 tons for new energy vehicles” is progressing smoothly. After the project is delivered, the annual production capacity of electromagnetic flat wire will increase to 60,000 tons, further satisfying applications in NEVs, photovoltaics and other industries. Currently, the company is preparing electromagnetic flat wire production capacity at its Vietnam base to meet the needs of overseas markets. The company actively cooperates with world-class mainframe manufacturers and motor suppliers on electromagnetic flat wire projects. Currently, there are 142 new energy electromagnetic flat wire development projects, 91 projects have been targeted, a total of 27 high voltage platform projects have been targeted, and batch supply of several 800V high voltage platform electromagnetic flat wire projects has been achieved.
Investment advice: The company's production capacity is increasing and improving. As copper processing (including flat wire) and new production capacity for high-performance NdFeB are put into operation, the company's 24-26 revenue is estimated to be 1285.73/1432.07/158.167 billion yuan, respectively; net profit to mother is 6.89/8.82/1,040 billion yuan, respectively; corresponding to the 24-26 PE 13.37/10.45/8.86 times, maintaining the company's “buy” rating.
Risk warning: copper processing output falls short of expectations; flat wire production falls short of expectations; competition in the NdFeB industry intensifies