考虑当前镁价和公司项目进展情况，我们下调镁价和青阳项目投资收益等假设，预计24-26 年公司EPS 分别为0.50、0.78、1.17 元/股（原24-25 年为1.40、2.11 元/股），考虑24 年镁价处于历史低位，而扩产项目在24 年仍处于初步释放阶段，估值选取25 年，根据可比公司25 年16XPE，对应目标价12.48 元，给予买入评级。The price of magnesium is low, and the cost performance ratio is outstanding. In June 2024, the average price of magnesium ingots in China was 19970 yuan/ton, and the price of aluminum was 20,584 yuan/ton. The magnesium-aluminum ratio continued to fall from the high level of 3.1 in September 21, falling to 0.98 by the end of June 2024, reaching a low level since 2010, and the price ratio of magnesium is outstanding. As the price of magnesium bottoms out close to or even lower than the price of aluminum, it is more beneficial to downstream applications such as large parts in automobiles, magnesium-based hydrogen storage, large automotive magnesium alloy integrated die-casting parts, and construction templates, and the enthusiasm of downstream customers to use magnesium is expected to increase further.
The industrial chain is making concerted efforts, and the penetration of magnesium auto parts is accelerating. In recent years, as the number of manufacturers with design and production capacity for large parts of magnesium alloy cars has increased, prices tend to be rationalized. Compared with other materials, magnesium materials are becoming more and more cost-effective, and their penetration rate in automobiles will become higher and higher, such as instrument panel holders, seat supports, central control brackets, display backpanels, electric drive cases, etc.
Upstream projects are progressing steadily to ensure the supply of downstream raw materials. Baowu Magnesium leads the world in the market share of magnesium and magnesium alloy products, forming a complete magnesium industry chain of “dolomite mining - raw magnesium smelting - magnesium alloy melting - magnesium alloy processing - magnesium alloy recycling”. The five plants produce 0.05 million tons of magnesium ingots and 0.07 million tons of magnesium alloy per year; the Chaohu plant produces 0.05 million tons of magnesium ingots and 0.15 million tons of magnesium alloy. The expansion project will be put into operation in the second half of 2024; the Huizhou plant is 0.03 million tons of magnesium alloy; and the Qingyang plant is currently being actively promoted and has now entered the production climbing phase.
Considering the current magnesium price and the company's project progress, we lowered the magnesium price and investment income of the Qingyang project. We expect the company's EPS to be 0.50, 0.78, and 1.17 yuan/share in 24-26 (1.40 and 2.11 yuan/share in 24-25), respectively. Considering that the magnesium price in 24 was at an all-time low, and the production expansion project was still in the initial release stage in 24, the valuation selected 25 years. Based on the comparable company's 16XPE in '25, the corresponding target price of 12.48 yuan, was given a purchase rating.
Risk warning
The risk of macroeconomics falling short of expectations; the risk of falling short of expectations from projects such as Qingyang; the risk of unanticipated demand for dolomite; the risk that demand for magnesium alloys and downstream deep-processing products falls short of expectations; the risk of fluctuating raw material prices; the risk that financing progress falls short of expectations; and the risk of rising balance ratios.