\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 609 Ningbo Jintian Copper (Group) Co.Ltd(601609) )
Key investment points
All new projects are progressing smoothly, with an output of 1.51 million tons, a year-on-year increase of 9.93%
2021 is a year for the company to rapidly promote new projects: (1) the "350000 T / a high strength, high conductivity and high toughness copper wire project", "20000 t / a special electromagnetic wire project for new energy vehicles and high efficiency motors" and "20000 t / a special-shaped precision copper bar project" in Guangdong base have been put into operation; (2) The construction of Chongqing base is progressing smoothly and has been put into operation in the first quarter of 2022. (3) Ningbo base is advancing rapidly. The "80000 T / a hot rolled copper strip project" was put into operation in the first quarter of 2022, and the "50000 T / a high strength and high conductivity copper alloy rod and wire project" is expected to be put into operation within this year. The total output of copper and copper alloy materials in the whole year was 1512900 tons (including 679300 tons of copper wire and 833600 tons of other copper processing products), and the external sales volume was 1332200 tons (including 562100 tons of copper wire and 770200 tons of other copper processing products), all reaching a record high.
The net profit of magnetic materials sector increased by 98.19% year-on-year, which is an important growth point in 2021
In the middle of 2021, the explosion of new energy vehicles and wind power installation drives the rapid growth of the demand for magnetic materials. The company has two magnetic material production bases in Ningbo and Baotou. It is one of the enterprises with high technical level and complete product series in China. In 2021, the wholly-owned subsidiary of Ketian magnetic industry realized an operating revenue of 1.111 billion yuan and a net profit of 136 million yuan, with a year-on-year increase of 98.19%, accounting for 21% of the total net profit attributable to shareholders of listed companies. The net profit increment of Ketian magnetic industry accounted for 29% of the net profit increment attributable to the parent company, which was an important growth point in 2021.
The rise of copper price superimposes that the company is in a "growth pain period", dragging down cash flow. It is expected to improve after the release of production capacity
According to the quotation of Changjiang nonferrous metals, the average copper price reached 68407 yuan / ton in 2021 and only 48898 yuan / ton in 2020, with a year-on-year increase of about 40%. The company's main business is copper processing. Whether it is raw materials, products in process or finished products, they are copper products. The sharply rising copper price occupies more obvious working capital of the company. On the other hand, the company has many projects under construction, and the production capacity is gradually released. Due to accounting period factors, new orders often need to increase the initial working capital, dragging down the cash flow. When the new capacity is fully released, the cash flow situation will improve.
The new energy process drives the demand for copper products. As a leader in copper processing, the company is expected to continue to benefit
According to the statistics of the International Copper Association, a pure electric car needs at least 83kg of copper products, while traditional fuel passenger cars only need about 20kg. The demand for copper of new energy vehicles has greatly increased. The new energy process will create new growth points of copper demand. The company actively welcomes the trend of electrification: (1) the new energy vehicle drive motor winding flat wire has achieved mass production, and plans to increase the annual production capacity of new energy flat wire products to 20000 tons in 2022; At the same time, we have actively arranged the research and development of 800V high-voltage electromagnetic flat wire technology, which has passed the certification of some vehicle enterprises. In addition, high-precision copper strip and copper bar for new energy motor heat dissipation module and oxygen free copper strip for IGBT have been mass produced or certified. As the leader of copper processing, the company is expected to undertake the new demand for high-end copper products in the field of new energy.
Profit forecast and valuation
From 2022 to 2024, the company is expected to realize a net profit attributable to the parent company of 904 million yuan, 1190 million yuan and 1.334 billion yuan, with a year-on-year increase of 22.02%, 31.61% and 12.11%, corresponding to 12.24 times, 9.30 times and 8.30 times of PE, maintaining the "buy" rating.
