\u3000\u3 Guocheng Mining Co.Ltd(000688) 388 Guangdong Jiayuan Technology Co.Ltd(688388) )
Key points
Event: the company released its annual report for 2021 and achieved an operating revenue of 2.804 billion yuan, an increase of 133.26% year-on-year; The net profit attributable to the shareholders of the listed company was 550 million yuan, a year-on-year increase of 195.02%; The net profit attributable to the parent company after deduction was 497 million yuan, a year-on-year increase of 203.54%. The performance is in line with expectations.
The release of new production capacity drives high performance growth. In 2021q4, the company achieved a revenue of 817 million yuan, a year-on-year increase of + 98%, a month on month increase of + 4.5%, a net profit attributable to the parent company of 156 million yuan, a year-on-year increase of + 123%, a month on month increase of + 3.8%, and a net profit not attributable to the parent company of 132 million yuan, a year-on-year increase of + 96%, a month on month decrease of – 1.67%. The year-on-year growth was mainly due to the release of new production capacity and the steady improvement of operational efficiency and profitability.
The product structure was optimized and the proportion of 4.5 microns was increased. In 2021, the company sold 28000 tons of copper foil, including 18400 tons of copper foil ≤ 6 microns and 9400 tons of copper foil above 6 microns. The product structure was continuously optimized. In the 21st year, the gross profit margin of lithium battery copper foil was 30.23%, with a year-on-year increase of 4pct, and the profitability maintained the leading level in the industry. We estimate that the net profit per ton of the company in 21 years is about 20000 yuan, and the sales volume of 4.5 microns accounts for about 20%, which effectively improves the profitability. New capacity is released and long-term capacity planning is active. In August 2021, the company wholly acquired Shandong Jiayuan new energy materials Co., Ltd. (formerly “Shandong xinliyuan”) with its own funds, and quickly achieved the goal of expanding production capacity through technological transformation and optimization. In December 2021, the trial production of the first production line with an annual output of 5000 tons of “15000 tons of high-performance copper foil project” in Baidu Town, Meixian district was successful. According to the reply announcement of the company’s inquiry letter, by the end of 2021, the effective capacity of the company’s copper foil was 26000 tons. From 2022 to 2025, the company is expected to achieve capacity of 45100 tons, 83100 tons, 101000 tons and 107000 tons respectively.
The product structure is improved, and the profitability is expected to remain high: the tight balance between supply and demand of copper foil is expected to continue in 2022, and the processing fee is expected to remain high. In addition, at present, the demand for 4.5 micron copper foil at the user end is increasing, and the company is one of the few manufacturers with 4.5 micron batch supply capacity, with leading product quality and technical level. With the increase of the application proportion of 4.5 microns and the launch of high value-added new products such as high tensile strength, the profitability of the company is expected to be further improved by virtue of the improvement of product structure and excellent cost control ability.
PCB high-end copper foil opens up growth space and grows together with high-quality customers. In November 2021, the company announced that it planned to raise an additional 4.9 billion yuan for Guangdong Jiayuan Technology Co.Ltd(688388) Park, Ningde, Shandong lithium battery copper foil project and Jiangxi electronic circuit copper foil project. The lithium battery copper foil project mainly serves the needs of Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , Funeng and other high-quality customers, and increases the high-end PCB copper foil to open up growth space. In December 2021, the company announced that it had signed a memorandum of intent on joint venture investment with Contemporary Amperex Technology Co.Limited(300750) to jointly build a high-performance copper foil project with an annual output of 100000 tons, so as to bind high-quality customers and grow together. On March 25, 2022, the company announced that it planned to invest no more than 1 billion yuan of its own funds or other self raised funds to build Jiangxi Jiayuan 15000 tons of high-end electrolytic copper foil project.
Maintain the “buy” rating: the company has a large scale of new production expansion, in-depth cooperation with leading battery manufacturers, full orders, and high capacity utilization. It is expected that the steady release of capacity will contribute to the performance increment. Fine tune the 22-23 year net profit forecast and add 24-year forecasts of RMB 1.175/19.77/2.989 billion respectively, corresponding to PE 18 / 11 / 7 times. As the leader of China Shipbuilding Industry Group Power Co.Ltd(600482) lithium battery copper foil, the company leads in technology and market share. Benefiting from the strong demand for new energy vehicles, PCB high-end copper foil opens up growth space and maintains the “buy” rating.
Risk tips: risks of capacity digestion, intensified competition, technology iteration, loss of core technicians, etc
