据公告，钨钼业务，受益于钨精矿价格上行、钨钼产品竞争力提升、光伏钨丝销量大幅提升，公司钨钼业务实现营收87.81 亿元，同比+10.98%，利润总额14.27 亿元，同比+29.50%。此外，公司销售细钨丝743 亿米，同比高达+119%。稀土和能源新材料业务，受原料价格下行和行业竞争加剧，公司稀土业务营收20.54 亿元，同比-21.48%，利润总额1.17 亿元，同比-23.50%；能源新材料业务营收63 亿元，同比-22.43%，利润总额2.46 亿元，同比-10.06%，维持一定的盈利韧性。房地产业务，上半年公司成功处置房地产板块相关股权，利润总额0.94 亿元，同比转正，并确认投资收益1.45 亿元。1H24 results slightly higher than our expectations
The company announced the 2024 semi-annual report results, and the 1H24 results were slightly higher than our expectations. The company's revenue for the first half of the year was 17.162 billion yuan, -8.37% YoY; net profit to mother was 1.017 billion yuan, +28.47% YoY. The company's revenue for the second quarter was 8.892 billion yuan, or -12.55%/+7.52%; net profit to mother for the second quarter was 0.589 billion yuan, or +67.83%/+38.02%. Net profit to mother in the single quarter reached a record high.
The tungsten and molybdenum business is growing strongly, driving overall profit growth, and the rare earth and new energy materials business is under relative pressure.
According to the announcement, the tungsten and molybdenum business benefited from rising tungsten concentrate prices, increased competitiveness of tungsten and molybdenum products, and a significant increase in photovoltaic tungsten wire sales. The company's tungsten and molybdenum business achieved revenue of 8.781 billion yuan, +10.98% year over year, and total profit of 1.427 billion yuan, or +29.50% year over year. In addition, the company sold 74.3 billion meters of fine tungsten wire, up to +119% year over year. The rare earth and new energy materials business, due to declining raw material prices and increased industry competition, the company's rare earth business revenue was 2.054 billion yuan, -21.48% year over year, total profit 0.117 billion yuan, -23.50% year on year; new energy materials business revenue was 6.3 billion yuan, -22.43% year on year, total profit 0.246 billion yuan, or -10.06% year on year, maintaining a certain level of profit resilience. In the real estate business, the company successfully disposed of shares related to the real estate sector in the first half of the year. The total profit was 0.094 billion yuan, which was corrected year on year, and confirmed investment income of 0.145 billion yuan.
Development trends
The company focuses on the three main businesses and continues to lay out upstream resources in the industrial chain and high-end downstream production capacity. The tungsten and molybdenum sector, on the resource side. According to Antec, the relationship between supply and demand for tungsten remained tight. The average price of tungsten concentrate in the first half of the year was +13%. According to the announcement, the company is promoting the construction of the Yumapo tungsten and molybdenum mine. We expect to contribute an annual output of 3,200 tons of tungsten concentrate after delivery, an increase of nearly 30% over current production. On the manufacturing side, in line with the high-end manufacturing industry and the trend of photovoltaic tungsten wire replacing carbon steel wire, the company is promoting projects such as cutting tools and 100 billion meter photovoltaic tungsten wire. In the rare earth sector, the company is building a 5,000 ton energy-saving motor magnet production expansion project and a 0.015 million ton rare earth resource recovery project. In the new energy materials sector, the company has completed the construction of a lithium-ion battery material project with an annual output of 0.04 million tons. In line with the demand for new energy vehicles, 3C electronics, energy storage, etc., the company plans to build a total annual production capacity of 0.045 million tons of lithium-ion battery materials, 0.07 million tons of lithium-ion battery cathode materials, 0.1 million tons of lithium iron phosphate, and 40,000 tons of precursor.
The fixed increase plan was approved, and the “improving quality, increasing efficiency and focusing on return” plan clarifies high-quality development and shareholder returns. On July 23, the company's fixed increase plan was approved by the Securities Regulatory Commission. The company plans to raise 3.53 billion yuan to advance the hard alloy cutting tools, 100 billion meter photovoltaic tungsten wire, and the Yumapo tungsten and molybdenum mine project. The construction period is 36/36/48 months. The company is expected to contribute 0.14 billion yuan, 0.25 billion yuan, and 68.67 million yuan to net profit after delivery. In addition, the company previously issued an action plan to “improve quality, increase efficiency, and focus on return”, which emphasizes high-quality development and enhanced added value of products, and plans to pay cash dividends based on 30% of the current year's net profit in the future, taking into account shareholders' returns.
Profit forecasting and valuation
Considering the decline in rare earth prices in the first half of the year, but the company's profit benefited more from rising tungsten prices and strong growth in the tungsten and molybdenum sector, we raised 2024e net profit 15% to 2.23 billion yuan, and introduced 2025e net profit of 2.43 billion yuan. The current stock price corresponds to 2024/2025 10.4/9.5x P/E. Maintaining an outperforming industry rating and target price of 20.6 yuan, corresponding to 2024/2025 13.1/12.0x P/E, with 26% upside.
risks
The price of tungsten concentrate fluctuated greatly; the commissioning of the company's projects fell short of expectations; downstream demand fell short of expectations.