Main points of investment
The company is a domestic leader in high-performance permanent magnet ferrite wet-pressed magnetic tiles. The company was founded in 1988, since its inception has been engaged in permanent magnet ferrite functional material technology development and related product production and sales. China is the main producer of wet magnetic tiles. In 2017, China's wet magnetic tile production capacity was 300000 tons, accounting for 70% of the world, while the company's permanent magnet ferrite wet magnetic tile production capacity was 25000 tons in 2019. Domestic enterprises with more than 10000 tons only account for about 9%.
The downstream market demand provides development space for permanent magnet ferrites. 1) Micro-special motor: the wet pressure magnetic tile is the core component of permanent magnet micro-special motor. From 2012 to 2016, the CAGR of production and sales of micro-special motor was 16.75% and 18.09% respectively. In the downstream application field of permanent magnet ferrite, the automobile industry and home appliance industry account for about 65% and 25% respectively. 2) Automotive field: permanent magnet ferrite is used in three major components and accessories of automobile engine, chassis and body. Automobile production has increased rapidly, with a CAGR of 9.64% in 2008-2019. In addition, the number of cars per thousand people in China was 174in 2019, compared with 837 in the United States in the same period, and the automobile industry still has a lot of room for development. 3) Home appliance industry: frequency conversion technology can solve the problem of energy saving of home appliances. With the application and popularization of frequency conversion technology, high-performance permanent magnet ferrite wet magnetic tile as an important functional component of DC frequency conversion motor, the development space can be further improved.
Fund-raising project: the company raised 353 million yuan, of which 179 million yuan was used for the "annual output of 8000 tons of high-performance permanent magnet ferrite wet-pressed magnetic tile project". The main products of this production line are SM-9 series high-performance wet-pressed magnetic tile; in addition, 100 million yuan is used to supplement working capital.
Profit forecast and rating: considering that the construction period of the investment project is 18 months and the downstream demand is affected by global public health events, it is estimated that the return net profit of the company from 2020 to 2022 is 0.82,0.97,119 million yuan respectively, and the EPS is 1.55,1.82,2.24 yuan respectively. Coverage for the first time, giving the company a "prudent overweight" rating.
Risk tips: downstream demand is not up to expectations; exchange rate fluctuations; risk of trade policy change; project process is not up to expectations.
