\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 137 Ningbo Boway Alloy Material Co.Ltd(601137) )
Event:
Ningbo Boway Alloy Material Co.Ltd(601137) released the first quarterly report of 2022:
In 2022, Q1 achieved an operating revenue of 3.226 billion yuan, 58.4% year-on-year and 24.9% month on month; The net profit attributable to the parent company was 136 million yuan, 15.5% year-on-year and 184% month on month. The net profit attributable to the parent company after deduction was 128 million yuan, a year-on-year increase of 13.7% and a month on month increase of 358.8%.
Key investment points:
The rise in raw material prices led to a year-on-year decline in gross profit margin in the first quarter 5pct. Since 2022, the prices of copper and polysilicon, the main raw materials of the company’s products, have continued to rise. As of March 2022, the price of copper has increased by 15.4% year-on-year, and the price of photovoltaic cells has increased by 66.8% year-on-year. The rise in the price of raw materials has led to the decline in the gross profit margin of the company’s main business. Considering that the company adopts the hedging mode in the new material business, the rise in copper price has little impact on the gross profit.
The stock of new materials business increased, and the construction in progress was promoted as planned. In Q1 2022, the company’s monetary capital was 826 million yuan, a decrease of 32.81% over the beginning of the year, mainly due to the increase of raw material preparation in new material business in response to the impact of the epidemic. The construction in progress of the company was 2.223 billion yuan, an increase of 207 million yuan compared with the beginning of the year. At present, the company’s projects under construction include: 50000 tons of special alloy strip project, 6700 tons of aluminum welding wire project, bakenhof (Vietnam) 31800 tons of rod and wire project, alumina dispersion copper project and special material project for intelligent terminal lens, which are all in progress according to the business plan. Among them, the 50000 ton sector and strip project has entered the stage of trial production and verification, with an IRR of 12.71%. In addition, the company is carrying out production line certification according to the requirements of downstream automotive electronics customers, and is expected to realize mass supply by the end of June 2022.
The new energy business turned losses into profits, and the contract liabilities for normal shipment of photovoltaic modules decreased by 74.39% month on month. At present, the company’s photovoltaic module capacity layout is in Vietnam. Since 2022, benefiting from the strong photovoltaic demand in the United States, the photovoltaic modules produced by the company’s Vietnamese factory have been shipped normally and began to make profits, and the contract liabilities have decreased by 74.39% compared with the beginning of the period. The pricing model of the company’s new orders in 2022 is signed on the basis of the existing sea freight and the market price of silicon materials. The company expects that if the price of silicon materials does not rise significantly in the future, the profitability of the existing orders is expected to be maintained.
As the leader of copper alloy materials in China, the company’s products are widely used in 5g, new energy vehicles, semiconductors and other fields. It is expected to fully benefit from localization and downstream demand growth. In the new materials sector, with the gradual release of 50000 tons of special alloy strip and 31800 tons of special alloy rod and line in Vietnam, the proportion of high-end products is expected to continue to increase. The PV module capacity of the new energy sector company has expanded from 700MW to 1GW. With the elimination of adverse factors such as the epidemic, the product sales have begun to recover. We estimate that the operating revenue of the company from 2022 to 2024 will be 13.22/14.39/15.19 billion yuan respectively, with a year-on-year growth rate of 32% / 9% / 6%, the net profit attributable to the parent company will be 6.5/8.46/1.023 billion yuan respectively, with a year-on-year growth rate of 109% / 30% / 21%, and the PE from 2022 to 2024 will be 11.5/8.8/7.3 respectively, maintaining the “buy” rating.
Risk indicates that the capacity expansion is less than expected; The price of raw materials has risen sharply; Downstream application expansion is less than expected; Geopolitical risks brought by international operation; The aggravation of the epidemic situation affects the operating rate; Sino US trade friction.
