The company's net profit fell by 40.5% in 2020, mainly due to the epidemic and increased R & D and financial costs. With the upgrading of copper alloy plate and strip products, capacity replacement and intelligent transformation projects gradually reach production, superimposed carbon fiber composite quality and release, the company's profitability is expected to be released. Give the company 24 times PE, in 2021 corresponding to the target price of 11.50 yuan, to maintain the company's "buy" rating.
The company's 2020 homing net profit fell by 40.5% and 2021Q1 increased significantly. In 2020, the company achieved revenue of 22.97 billion yuan, + 34.8% compared with the same period last year; the net profit of returning to the mother was 270 million yuan,-40.5% compared with the same period last year, mainly due to 1) the gross profit margin of major products decreased due to the epidemic; 2) the fund-raising projects were in the running-in period and the profitability has not yet been shown; 3) the R & D and financial expenses increased. With the gradual release of copper processing capacity, the continuous optimization of product structure, and the continued improvement of the business of new military materials and special equipment, the company's 2021Q1 performance has greatly improved, with the realization of net profit / non-return net profit of 12 million yuan, respectively, compared with the same period last year. + 227.8% and 182.6% respectively.
Carbon fiber composites are the highlight of the company's business in 2020. 1) affected by the epidemic, the company's gross profit margin of metal materials decreased compared with the same period last year. Among them, the sales volume of copper-based / steel-based materials was 538%, 16.2 million tons, + 29.9%, 6.7%, and the gross profit margin was-0.7%, 0.1%, compared with the same period last year. 2) as a national second-class secret unit with complete military qualifications, the subsidiary Tianyao Hi-Tech specializes in carbon fiber composite materials. In 2020, the operating income / net profit was 40,000,000 yuan / 150 million yuan respectively, compared with the same period last year. 34.3%, and the net interest rate reached 37.6%. It has become the bright spot of the company in 2020. 3) Dingli Technology, a subsidiary of Dingli Technology, is a leading high-end thermal equipment enterprise in China. Due to the impact of the epidemic, the gross profit margin of its products has dropped sharply, and its operating income / net profit has reached 170 million yuan respectively. Compared with the same period last year, it was-13.3% and 59.4% respectively.
Production capacity expanded in an orderly manner, and profitability was gradually released. The company plans to achieve sales of 61.3 million tons of copper-based / steel-based materials in 2021, which is 4.9% of the same period last year. With the gradual commissioning of new copper strip, copper wire and copper wire projects, we expect the company's copper production capacity to increase from 635000 tons of 2021Q1 to 1.1 million tons in 2023, corresponding to 20% of CAGR. At that time, the production and sales of copper strip is expected to be the first in the world. And with the promotion of copper alloy strip product upgrading, capacity replacement and intelligent transformation, the profitability of copper strip is expected to be gradually enlarged. With the growth of superimposed high-end equipment and carbon fiber composites under the demand of the military industry, the company's profitability is expected to be further improved.
Risk factors: project construction is not as expected; downstream demand is not as expected; COVID-19 epidemic control is not as expected.
Investment suggestion: we adjust the company's 2021-2022 return net profit forecast to 641 million yuan (the original forecast is 735 million yuan, which is adjusted according to the copper production assumption), and the new 2023 net profit forecast is 1.008 billion yuan, corresponding to the EPS forecast of 0.48 inch 0.61 hundred 0.76 yuan respectively. Combining the valuation of Copper and military Materials Company, the company will be given 24 times PE, in 2021 corresponding to the target price of 11.50 yuan, maintaining the "buy".
Rating.