On April 29, the company released its annual report for the year 23 and the quarterly report for '24. It achieved total revenue of 75.749 billion yuan, +2.36% year over year, net profit to mother of 1,118 billion yuan, -7.46% year on year; 1Q24 achieved total revenue of 21,852 billion yuan, +247.96% month-on-month, and net profit of 315 million yuan, +112.67% month-on-month.
The profitability of copper pipes and copper bars has increased. In '23, the company sold 857,300 tons of copper and copper alloy processing products, of which 852,800 tons of copper processing products were sold, -1.36% year-on-year, and 2H23 sold 408,300 tons of copper and copper processed products, or -7.13% month-on-month. (1) Copper tube: Revenue of 41.02 billion yuan in 23 years, +0.58% year over year, gross margin +0.31 percentage points year on year to 6.09%.
(2) Copper bar: Revenue of 4.818 billion yuan in 23 years, -19.42% year-on-year, gross margin -0.06 percentage points year-on-year to 5.54%. (3) Copper row: Revenue of 195,700 tons in '23, +2.97% year over year, gross margin +0.13 percentage points year on year to 1.84%. (4) Copper foil: Revenue of 735 million yuan in 23 years, +893.50% year over year, gross margin was -31.20 percentage points year over year to -24.17%. Despite the impact of the decline in sales of the company's copper processing products in '23, revenue was +2.36% to 75.749 billion yuan. The profitability of copper pipes and copper bars increased, and the company's gross profit was +0.39% year-on-year to 2.55 billion yuan.
Q1 Increased scale of production and sales promotes performance growth. Q1 The company's product sales increased. During the same period, the company's total revenue was +247.96% month-on-month to 21,852 billion yuan, revenue +249.98% month-on-month to 21,817 billion yuan, operating costs +265.41% month-on-month to 20.895 billion yuan, and operating profit +78.82% month-on-month to 922 million yuan.
R&D capabilities are outstanding, and net profit per ton is expected to recover. The company invested 824 million yuan in R&D in '23, +8.60% over the same period last year. In 23, there were 24 copper tube product development projects, and 78,000 tons of new products were replaced and sold throughout the year; there were 8 pipe fittings product development projects and 38 equipment R&D projects. The company's net profit per ton of copper processing products was 1,311 yuan, compared with -6.19%. The technical yield of the fifth-generation continuous casting and rolling precision copper tube production line independently developed by the company increased from 91% to 93%. The comprehensive energy consumption of the product was reduced by 300 kwh, and the comprehensive cost per ton can be reduced by 700 yuan. Currently, the company is upgrading the copper tube production line. It is expected that the overall transformation plan will be completed by the end of 2024. At that time, the copper tube production capacity will increase to 1.31 million tons. With the application of continuous casting and rolling technology and the increase in production and sales, the company's net profit per ton of copper processing products is expected to recover.
The company's revenue for 24-26 is estimated to be 971/1109/116.9 billion yuan, net profit to mother is 1,526/19.31/2,074 billion yuan, EPS is 0.76/0.97/1.04 yuan, respectively, and the corresponding PE is 12.34/9.75/9.08 times, respectively. Maintain a “buy” rating.
Risk warning
Project progress falls short of expectations; copper prices fluctuate; demand falls short of expectations; RMB exchange rate fluctuates.