In the past 21 years, the nonferrous metal sector achieved the best performance in history, and the industrial metal sector achieved both volume and price increases. In 2021, the revenue and net profit attributable to parent company of non-ferrous metal sector reached a record high, with an operating revenue of 2699379 billion yuan, a year-on-year increase of 36.97%, and a net profit attributable to parent company of 106690 billion yuan, a year-on-year increase of 167.24%. Among the secondary sub sectors, except for the decline of precious metal performance, the rest achieved performance growth. Among them, the volume and price of industrial metal sector increased simultaneously. In 2021, the operating revenue of the sector reached 1869731 billion yuan, a year-on-year increase of 55.41%, and the net profit attributable to the parent was 62.577 billion yuan, a year-on-year increase of 254.26%. Among the three sub sectors, the performance of the rare earth sector increased by 340.23% due to the sharp rise in the prices of rare earths such as praseodymium and neodymium oxide.
In the past 22 years, Q1 industry continued high growth as a whole, and the performance of energy metal sector was brilliant. Despite the reasons for the high base in 21 years, the operating revenue and performance of Q1 nonferrous metals sector in 22 years still increased by 55.77% and 141.42% year-on-year, with a month on month increase of 3.61% and 60.39% respectively. Meanwhile, since the beginning of the year, lithium prices have entered a rapid rising channel. By the end of the first quarter, battery grade lithium carbonate exceeded 500000 yuan / ton and battery grade lithium hydroxide nearly 490000 yuan / ton, an increase of more than 10 times compared with the beginning of 2021; The performance of the energy metal sector continued to shine. In 2022, the Q1 revenue was 35.256 billion yuan, a year-on-year increase of 892.56%, and the net profit attributable to the parent company was 10.267 billion yuan, a year-on-year increase of 226558%.
The overall profitability of the industry has improved significantly, and the industry valuation is still at a historical low. In 2021, the overall roe of the non-ferrous metal industry was 12.85%, up 7.78 percentage points year-on-year, a new high in recent years; In Q1 2022, the overall roe of the industry continued to rise to 4.38%, up 2.04% year-on-year and 1.41% month on month respectively, the best level in the same period in recent 10 years. The improvement of roe mainly depends on the growth of sales profit margin. The overall sales profit margin of the industry in 2021 was 4.55%, which doubled compared with 20 years; In Q1 2022, the sales profit margin continued to rise to 6.53%, with a significant increase of 2.67% year-on-year and 2.51% month on month respectively. By the end of the first quarter of 2012, PE in the non-ferrous metal industry was 25.05, which is not a small gap from the historical median price earnings ratio of 43.47x and is still at the bottom of history.
Small metals: the demand for magnesium automobile structural parts and magnesium building formwork is about to burst. In recent years, magnesium alloy is accelerating its promotion to downstream industries. Among them, magnesium lightweight automobile structural parts and magnesium building formwork are expected to become the demand explosion point. According to our prediction, under optimistic circumstances, the demand for magnesium alloy for magnesium automobile hub and magnesium battery pack shell is expected to increase by 243300 tons and 54000 tons respectively by 2025; If magnesium building formwork replaces aluminum building formwork smoothly, the ratio of magnesium to aluminum is expected to reach 7:3 in the future, and the demand for magnesium will increase by 789600 tons. In the long run, we believe that magnesium will be a high-quality and growing small metal in the next five years. Recommended attention: reach a strategic cooperation relationship with Baosteel metal to build the leading magnesium industry in the world's largest magnesium production base Nanjing Yunhai Special Metals Co.Ltd(002182) ; Join hands with Contemporary Amperex Technology Co.Limited(300750) to cut into Sanxiang Advanced Materials Co.Ltd(603663) of magnesium battery pack structural parts and electric ships.
Industrial metals: nickel is expected to lead industrial metals by taking advantage of new energy Dongfeng. The demand for high nickel ternary materials breaks out, which is expected to become the main demand growth point of nickel within five years, and nickel is expected to become the next highly elastic lithium battery metal. In recent years, Chinese enterprises have laid out laterite nickel mines in Indonesia, with significant first mover advantages, and the production capacity will usher in a large-scale release period. Recommended concern: Indonesia Huayue wet 60000 ton production line has been successfully put into operation, and the upstream integration leader of lithium battery with 45000 tons of thermal capacity will be added in the future Zhejiang Huayou Cobalt Co.Ltd(603799) ; Comprehensive nonferrous metal operation enterprise with 34000 tons of high matte nickel successfully put into operation Chengtun Mining Group Co.Ltd(600711) ; The leading ternary precursor with 50000 tons of wet production capacity expected to be put into operation in 2022 Gem Co.Ltd(002340) .
Precious metals: it is expected that in 2022, the gold price will play a game around high inflation, geopolitics, interest rate increase and table contraction, and will fluctuate in a narrow range at a high level. Taking into account the resilience of high inflation and the possibility that the economic downturn will curb the process of raising interest rates, the allocation value of gold remains unchanged. Recommended attention: Yintai Gold Co.Ltd(000975) , with excellent resource endowment and accelerated growth; Golden dragon head with normal production Shandong Gold Mining Co.Ltd(600547) ; Silver faucet Shengda Resources Co.Ltd(000603) .
Nonferrous processing sector: under the new order cycle, the profitability of processing enterprises is expected to improve, and leading enterprises benefit from the improvement of industry concentration. Under the new order cycle, the decline in processing profits caused by the mismatch between orders and raw materials will be improved. At the same time, 1) the processing fee of the industry has fallen to the bottom, and there are strong expectations for the rise of processing fee in copper pipe processing and other fields in the future; 2) The product structure of leading enterprises began to turn to products with high gross profit and high technical barriers; 3) In the downturn of the industry, leading enterprises are expected to occupy a larger market share by taking advantage of capital and technology. Many processing stocks fell sharply in the first quarter. With the recovery of demand after the improvement of the epidemic, high-quality processing stocks are expected to usher in value restoration. Highlight: join hands with Baosteel metal to expand the magnesium industry and enter the leading magnesium industry in the field of automobile lightweight Nanjing Yunhai Special Metals Co.Ltd(002182) ; Copper processing leader Anhui Truchum Advanced Materials And Technology Co.Ltd(002171) , marching into new military materials and high-end thermal equipment and continuously optimizing product structure; Cost advantage, casting barriers, cutting into the copper tube industry leader in the field of lithium battery copper foil Zhejiang Hailiang Co.Ltd(002203) .
Risk tip: policy uncertainty, weak downstream demand and geopolitical conflict
