The company focuses on tantalum-niobium products, leading the industry in technology and market share. The fund-raising project makes up for the company's production capacity shortfall. Ultrapure metallurgical grade tantalum powder and superconducting niobium cavities for semiconductor targets are expected to become new business growth points. First coverage, giving a “Highly Recommended” investment rating.
Tantalum and niobium industry leader, fund-raising projects make up for shortfalls in production capacity. The company is the largest manufacturer of tantalum and niobium products in China. It has international advanced tantalum-niobium production technology. The domestic market share for capacitor-grade tantalum powder is over 50%, the global market share is over 10%, and the global market share for tantalum wire for capacitors is over 40%. The company's new fund-raising projects focus on pyrometallurgy, products and niobium superconducting cavity products to make up for shortfalls in production capacity. Additional production capacity of 180 t/year of smelting products, 140 t/year of casting product production capacity, 6,018 t/year of forging throughput, tantalum-niobium plate products will reach 70 t/year, and 70 additional niobium superconducting cavities per year.
Ultrapure metallurgical grade tantalum powder for semiconductor targets is expected to achieve a breakthrough. With the spread of 5G, the semiconductor industry has broad prospects for development. The company's semiconductor target business has made positive progress, and the global demand for target tantalum powder is expected to be about 587 tons in 2023. The company has made every effort to promote the R&D, certification and evaluation of 12-inch tantalum target billets. After nearly 6 years of follow-up, it has now completed test sample testing and evaluation and achieved mass sales. In 2022, the company's sales of ultra-high purity metallurgical grade tantalum powder for semiconductor targets achieved a “leap forward” growth.
Superconducting niobium cavities are expected to become a new business growth point. The company's niobium superconducting cavity technical indicators are at the leading level. The domestic market share of superconducting niobium materials is about 80%, the global market share is about 60%, and the domestic market share of niobium superconducting cavities is about 40%. The subsidiary Dongfang Superconducting currently has the capacity to produce 30 9-cell niobium superconducting cavities per year, and plans to expand production capacity to 100 units/year. The construction of major domestic scientific installations is accelerating to guarantee demand.
The participation in Nishizai Institute contributed to a considerable return on investment. The Xizai Institute is the only beryllium research and processing base in China. It is engaged in beryllium wood research and processing business. The domestic market share of beryllium products exceeds 70%, the revenue and net profit growth rate has increased significantly, and the four-year compound growth rate of net profit exceeds 20%.
First coverage, giving a “Highly Recommended” investment rating. It is estimated that in 2023-2025, the company's net profit to mother will be 2.0/23/260 million yuan, respectively, and the corresponding PE will be 26/23/19 times, respectively, covered for the first time, and given a “highly recommended” investment rating.
Risk warning: risk of raw material price fluctuations, risk of demand falling short of expectations, risk of falling short of expectations in fund-raising projects, risk of exchange rate fluctuations, etc.