In 2021, the performance of A-share copper listed companies generally rose.
As of April 21, among the 16 listed companies in the copper sector of Shenwan’s tertiary subsidiary industry, except for 3 that have not yet disclosed their performance, the net profit attributable to the parent company in 2021 of 8 companies, including Zijin Mining Group Company Limited(601899) ( Zijin Mining Group Company Limited(601899) . SH), Jiangxi Copper Company Limited(600362) ( Jiangxi Copper Company Limited(600362) . SH), Guangdong Jiayuan Technology Co.Ltd(688388) ( Guangdong Jiayuan Technology Co.Ltd(688388) . SH) and Nuode Investment Co.Ltd(600110) ( Nuode Investment Co.Ltd(600110) . SH), increased by more than 100% year-on-year The year-on-year growth range of Yunnan Copper Co.Ltd(000878) ( Yunnan Copper Co.Ltd(000878) . SZ), Ningbo Jintian Copper (Group) Co.Ltd(601609) ( Ningbo Jintian Copper (Group) Co.Ltd(601609) . SH) and Guangdong Jingyi Metalco.Ltd(002295) ( Guangdong Jingyi Metalco.Ltd(002295) . SZ) is 0% ~ 100%; Only Gripm Advanced Materials Co.Ltd(688456) ( Gripm Advanced Materials Co.Ltd(688456) . SH) and Jiangyin Electrical Alloy Co.Ltd(300697) ( Jiangyin Electrical Alloy Co.Ltd(300697) . SZ) declined.
Zijin Mining Group Company Limited(601899) said in the annual report that in 2021, affected by the global economic recovery and limited supply recovery, the international copper price hit a record high of US $10700 / ton. WoodMac data show that in 2021, the supply of mineral copper increased by only 2.5% year-on-year, the supply of refined copper increased by 2.7% year-on-year, and the demand for refined copper increased by 4.1% year-on-year. At the end of 2021, the global dominant copper inventory was only about 340000 tons, a record low. At the same time, the demand for copper for new energy increased rapidly that year, reaching about 1.8 million tons, a year-on-year increase of 19%, accounting for 7% of the total demand for copper.
Nuode Investment Co.Ltd(600110) a person from the Securities Department told the reporter of China business daily, “in 2021, the demand for copper foil in the downstream lithium battery industry increased, and the company’s output and sales volume increased greatly, so the performance rose sharply.” Guangdong Jiayuan Technology Co.Ltd(688388) Securities Department told reporters that its performance growth was mainly due to the continuous release of production capacity after the relevant copper foil projects were put into operation, resulting in the simultaneous rise of sales performance.
performance and output record high
Copper is a basic industrial metal with purplish red single substance and good ductility, thermal conductivity and conductivity. It is widely used in the fields of electric power, household appliances, transportation, electronics, construction, aerospace and military industry.
Copper mining and smelting usually need to go through mining (copper ore), washing (copper concentrate), roughing (crude copper), refining (cathode copper) and other links, and then use copper and its alloy as raw materials to make sectors, strips, wires, tubes, rods and foils of various shapes to meet the consumption needs of downstream industries.
In 2021, with the high volatility of copper prices outside China, the performance and output of many upstream copper mining enterprises reached a record high.
According to the Research Report of Founder’s medium-term futures, the trend of copper price in 2021 showed a high shock after a sharp rise. As of the closing on December 13 of that year, the main force of Shanghai copper had increased by more than 20% annually, with the highest rising to 78300 yuan / ton and the lowest reaching 56900 yuan / ton; The main international copper increased by 20% annually, with the highest rising to 71100 yuan / ton and the lowest reaching 50600 yuan / ton.
According to the recently disclosed financial data, Zijin Mining Group Company Limited(601899) , Jiangxi Copper Company Limited(600362) and Tongling Nonferrous Metals Group Co.Ltd(000630) ( Tongling Nonferrous Metals Group Co.Ltd(000630) . SZ) achieved record high performance in 2021, with revenue of 225.1 billion yuan, 442.8 billion yuan and 131 billion yuan respectively, with a year-on-year increase of 31%, 39% and 32%; The net profit attributable to the parent company was 15.7 billion yuan, 5.6 billion yuan and 3.1 billion yuan respectively, with a year-on-year increase of 141%, 143% and 258%.
Tongling Nonferrous Metals Group Co.Ltd(000630) said in its 2021 annual report that during the reporting period, affected by loose monetary policy, strong demand, green economy transformation and other factors, bulk commodities performed well as a whole, copper prices rose sharply, and the annual average spot price of copper reached 68500 yuan / ton, up 40% year-on-year; The price of by-product sulfuric acid fluctuated and rose in the first three quarters, reaching a high of nearly 10 years. Moreover, China’s copper price is more than 200 yuan higher than LME copper price on average, which has played a positive role in improving the company’s benefits.
In terms of output, in 2021, Zijin Mining Group Company Limited(601899) the output of mineral copper was 584000 tons, with a year-on-year increase of 29%; The output of mineral gold was 47.5 tons, a year-on-year increase of 17%. At the same time, Zijin Mining Group Company Limited(601899) said that 2021 was the turning point of its internationalization, and it had arranged projects in 13 overseas countries. In that year, the company’s overseas copper and gold resources and output exceeded that of China.
The cathode copper output of Jiangxi Copper Company Limited(600362) , Tongling Nonferrous Metals Group Co.Ltd(000630) and Yunnan Copper Co.Ltd(000878) in 2021 was 1.78 million tons, 1.59 million tons and 1.35 million tons respectively, with a year-on-year increase of 8.5%, 12% and 3%; Gold output was 71.7 tons, 15.9 tons and 18.1 tons, with year-on-year growth of – 9%, 20% and 7%; Silver output was 1124 tons, 621 tons and 676 tons, with a year-on-year increase of – 0.2%, 36% and 9%; The output of sulfuric acid was 5.3 million tons, 4.87 million tons and 4.63 million tons, with a year-on-year increase of 4%, 11% and – 0.6%.
Yunnan Copper Co.Ltd(000878) said in the annual report that in 2021, the output of cathode copper and gold and silver by-products of the company reached a record high.
downstream market demand differentiation
As a metal with conductivity second only to silver, copper is an indispensable raw material for the development of green energy and has become one of the metal materials that benefit the most from the development of photovoltaic, wind power and new energy automobile industries.
Jiangxi Copper Company Limited(600362) said that the overall consumption of copper downstream industry was good in 2021, and various industries were differentiated. Among them, the investment in photovoltaic, wind power and other new energy fields is driven by the carbon neutralization policy, and the consumption of cables and power generation equipment is strong. Relevant statistics show that the output of power cables increased by 22.9% year-on-year and the output of power generation equipment increased by 9.9%. The overall consumption performance in the field of household appliances was good. From January to October, the output of washing machines, air conditioners and freezers increased by 9.5%, 9.4% and 7.9% respectively, while the output of engines and refrigerators increased negatively.
The above research report of Founder medium-term futures shows that in 2021, the demand for copper reflects the situation of strong external and weak internal. The recovery of copper production in developed countries in Europe and the United States has led to an increase in industrial demand.
According to the research report, in 2021, the main end consumption of copper such as power grid, infrastructure and real estate are facing the problem of insufficient investment. In addition, the outbreak of local covid-19 pneumonia in many provinces in the second half of the year and the dual control measures of energy consumption have led to the operating rate of main copper processing enterprises lower than the average level of the previous five years. However, the operating rate of copper sector and foil with high correlation with new energy remained higher than that in previous years, becoming the consumption highlight of that year.
The research report also pointed out that the copper consumption of new energy vehicles per vehicle is 3 ~ 4 times that of traditional fuel vehicles, and the copper consumption of each new energy vehicle can reach 80kg. For example, in 2022, the global production and sales of 10 million new energy vehicles will bring 800000 tons of copper demand without considering the reduction of traditional vehicles.
In 2021, Guangdong Jiayuan Technology Co.Ltd(688388) , Nuode Investment Co.Ltd(600110) and Tongguan copper foil (301217. SZ), which are in the new energy vehicle industry chain and mainly engaged in lithium battery copper foil, achieved eye-catching performance, with revenue of 2.8 billion yuan, 4.4 billion yuan and 4.1 billion yuan respectively, with a year-on-year increase of 133%, 106% and 66%; The net profit attributable to the parent company was 550 million yuan, 400 million yuan and 370 million yuan, with a year-on-year increase of 195%, 7409% and 412%.
“The company’s main business is copper foil business, which is used in the downstream lithium battery and PCB (printed circuit board) field. After the relevant projects are put into operation in 2021, the production capacity will continue to be released, so the sales performance will rise simultaneously.” Guangdong Jiayuan Technology Co.Ltd(688388) Securities Department told reporters.
Nuode Investment Co.Ltd(600110) securities department also told reporters that in 2021, the demand for copper foil in the downstream lithium battery industry increased, and the company’s output and sales increased greatly, so the performance rose sharply.
A person from Tongguan copper foil Securities Department told reporters: “the rapid growth of the company’s return to parent net profit is due to the severe impact of covid-19 pneumonia in the whole year of 2020, and the downstream manufacturers returned to the previous operating state in 2021. At the same time, the demand in the downstream NEW energy vehicles, electronic components and other fields is very good, and the company has significantly increased the proportion of 6 micron copper foil products, which has improved the profit.”
However, the performance of Gripm Advanced Materials Co.Ltd(688456) and Jiangyin Electrical Alloy Co.Ltd(300697) copper processing enterprises was poor. In 2021, the net profit attributable to the parent company was 84 million yuan and 106 million yuan respectively, a year-on-year decrease of 36% and 8% respectively.
\u3000\u3000 “The company’s copper products are mainly used in the fields of power transmission and distribution and railway. In 2021, the business in the field of power transmission and distribution achieved steady growth, but the business in the railway field was at a low ebb, resulting in a decline in the company’s net profit attributable to the parent company. In 2021, the whole copper processing industry made steady progress, and the incremental markets such as new energy vehicles, wind power and photovoltaic performed well. At present, the company is also promoting the business related to new energy vehicles, and if the follow-up is smooth, it will have a good performance in the future It is reflected in the. ” Jiangyin Electrical Alloy Co.Ltd(300697) Securities Department told reporters.
Gripm Advanced Materials Co.Ltd(688456) explained in the performance express that the net profit attributable to the parent company decreased by 36%, mainly due to a relocation income of 72 million yuan in 2020. If the non operating profit and loss is deducted, the net profit attributable to the parent company will increase by 39% year-on-year in 2021.
second quarter trend “cautious”
As a representative commodity, the price of copper is affected by many factors. For processing enterprises not involved in copper mining and smelting, the impact of copper price fluctuation is also different.
According to the above-mentioned research report of Founder medium-term futures, in the first quarter of 2022, Shanghai copper showed a shock upward trend. During this period, it once rushed up to the front line of 77000 yuan / ton under the influence of Lun Ni’s warehouse squeeze market, and the overall operation range was 69000 ~ 77000 yuan / ton. As of the closing on March 25, the main contracts of Shanghai copper had increased by 3.9% in the first quarter.
According to the analysis of the research report, the copper price in the first quarter of 2022 was dominated by macro factors, and the risk premium and supply shortage expectation caused by geopolitical conflict were the main reasons for the upward rise of copper price. In addition, the expected landing of the Federal Reserve’s interest rate increase also promoted the upward rise of risky assets. From a fundamental point of view, there is a contradiction between weak display and strong expectation in China. After the central economic work conference, the market’s expectation of fiscal policy, especially the power investment in infrastructure, will effectively stimulate the medium and long-term copper market.
Jiangyin Electrical Alloy Co.Ltd(300697) a person from the Securities Department told reporters: “copper, as a bulk commodity, has a relatively open and transparent market, so the company’s raw material copper is mainly purchased through traders. The decline in the company’s net profit attributable to the parent company in 2021 is partly due to the sharp rise in the price of raw materials, which leads to the rise of accounts receivable and the increase of bad debt provision.”
“The pricing model of the company is’ copper price + processing fee ‘, so the rise of copper price in 2021 has a limited impact on the overall production and operation of the company.” Guangdong Jiayuan Technology Co.Ltd(688388) .
According to a person from Tongguan copper foil securities department, the company’s business is mainly to produce copper foil with copper wire as raw material, and the copper wire is purchased from the parent company Tongling Nonferrous Metals Group Co.Ltd(000630) . The rise of copper price in 2021 has a certain impact on the company’s working capital. However, since the company will adjust the product price every month, the increased cost will be transferred to the downstream, which has little impact on the company.
Yunnan Copper Co.Ltd(000878) said that in 2022, the main contradiction in the copper market is still the uncertainty disturbance at the raw material supply side. It is expected that the copper price trend will continue to fluctuate widely in 2021, with obvious upper pressure and lower support, and the price is dominated by high fluctuation.
According to the Research Report of Founder’s medium-term futures, looking forward to the second quarter of 2022, there is a rebound momentum in the copper market, supported by the geopolitical risk premium, the Federal Reserve’s interest rate hike, the landing of interest rate and the empty out of interest and the historical low of inventory. However, the uncertainty of Chinese consumption suppresses the upper space. On the whole, the cautious thinking is maintained. The lower support level is 71000 yuan / ton and the upper resistance level is 77000 yuan / ton.
