\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 137 Ningbo Boway Alloy Material Co.Ltd(601137) )
China platform company of special copper alloy benefits from the increased demand for high-end copper strip
Focus on new materials + supplemented by new energy, and focus on new materials. The company’s new materials sector is mainly engaged in copper alloy production, with little impact on copper price, which is mainly driven by product added value and is the main source of current profits. The new energy sector produces photovoltaic cell modules and operates power stations as a profit supplement.
Build a special copper alloy platform company to realize gradual import substitution. The company is one of the few enterprises in China with the production capacity of copper nickel silicon / copper chromium zirconium and other high-end products. Through the digital R & D technology platform, some high-end brands have realized import substitution in the fields of semiconductor, automotive electronics, 5g communication and so on. The gross profit margin of the company is at least 5 percentage points ahead of its Chinese counterparts.
High end copper strip has large demand increment space in vehicle connectors, semiconductors and so on. It is estimated that the demand for high-end copper strip brought by new energy vehicle connectors in 22-25 years is about 240000 tons, and the demand increase in China is about 120000 tons. The acceleration of domestic substitution of lead frame will also effectively stimulate the demand for high-end copper strip. It is estimated that the copper alloy sales volume of the company will increase by 30% in 21-23 years.
The volume of new materials has increased with strong certainty, and new energy has bottomed out and rebounded
New materials: 1) quantity. The 50000 ton high-end sector and strip project has a large volume. Under the first mover advantage, the increase of the company’s production and sales volume has strong certainty. It is estimated that the sales volume of copper alloy in 21-23 years will be 19.3/22.2250000 tons respectively. 2) Lee. The company’s gross profit per ton has two driving forces: first, the production of 50000 tons of high-end new production line brings about the optimization of product structure; Second, the added value of stock products continued to increase driven by downstream demand. The company’s gross profit per ton will continue to increase from 3328 yuan / ton to 6268 yuan / ton in 16-20 years. It is expected that the company’s gross profit per ton will increase to 6600 / 7300 / 7700 yuan / ton in 21-23 years.
New energy: the performance of 21 years is facing losses under the drag of sea freight and raw material costs. It is expected to usher in profit restoration in 22 years and contribute to the marginal increment.
Profit forecast & investment suggestions
It is predicted that the net profit attributable to the parent company from 21 to 23 will be 360 / 62 / 830 million yuan, with a year-on-year increase of – 15.41% / + 70.89% / + 33.33%. The EPS will be 0.46/0.79/1.05 yuan respectively, and the corresponding PE will be 42 times, 24 times and 18 times respectively. Give a valuation of 30 times the performance in 2022, corresponding to the market value of 18.6 billion yuan, and give a “buy” rating for the first time.
Risk tips
The risk that the expansion of copper alloy production is less than expected, the risk that downstream sales are less than expected, the risk of copper price fluctuation, the risk of lifting the ban on restricted shares, the risk of shareholder reduction, the risk of RMB exchange rate fluctuation, etc.
