Yunhai Metal (002182): Magnesium price growth supports the company’s performance Car lightening and aluminum deep processing expansion projects
Incident Yunhai Metal released the 2018 annual report, and the company achieved operating income of 51 in 2018.
10,000 yuan, an increase of 3 in ten years.
54%; net profit attributable to parent company3.
30 ppm, an increase of 112 per year.
83%; realized profit of 0.
Our Analysis and Judgment (1) The rise in magnesium prices has boosted the company’s performance, and the relocation has increased the profits and increased the company’s product sales in 2018, reaching 40.
22 Every year, at least 900 tons are 北京桑拿洗浴保健 lifted.
The gross profit of magnesium alloy products reached 2.
59 trillion, accounting for a contribution of up to 33.
It is said that the average price of magnesium ingots in the non-ferrous metals market in Yangtze River shows that the average price of magnesium ingots rose to 17,456 in 2018.
58 yuan / ton, up 9 before.
66%; the gross margin of magnesium alloy reaches 17.
98% increased by 3 over the same period in 2017.
15 units, the maximum gross profit scale increased by 31.
In addition, the gross profit margins of air conditioning flat tubes and metallic strontium reached 27.
48% and 36.
53%, an increase of 0.
99 and 9.
In 2018, the subsidiary Suzhou Yunhai received government demolition subsidies. The company also received government demolition subsidies and non-recurring 佛山桑拿网 profit and loss items such as asset disposal gains and losses totaling 1.
21 trillion, accounting for 30% of total profits.
According to the company’s relocation framework agreement with Nanjing City’s top management, it is expected that it will still be relocated in the next three years.
(2) The difficulty of environmental protection mines has led to tight supply of raw magnesium. The light weight of new energy vehicles has helped to reduce the demand for magnesium supply, which has mainly led to the tightening of environmental protection policies and the tight supply of blue carbon.
Environmental protection transformation has caused some companies to face limited production shutdowns. At the same time, due to mining accidents in Inner Mongolia and Shenmu Fugu, the supply of raw materials for magnesium smelting fuel blue carbon has been tight.
According to China Nonferrous Metals News, in 2018, environmental protection and other factors resonated to affect the magnesium market supply. Southwest Shaanxi, Shanxi, and Ningxia and other major magnesium producing areas had insufficient operating rates, reduced output, and tightened the supply side.
According to the statistics of Asian Metal Network, the operating rate of Chinese magnesium ingot producers was only 38 recently.
68%, a decrease of 21 per year.
1%; In January 2019, the magnesium ingot inventory of Chinese magnesium alloy producers was 1,630 tons, a decrease of 7 from the previous month.
4%, a decrease of 1 per year.
3%; According to the statistics of the Nonferrous Industry Association, the annual output of raw magnesium in 2018 was 86 digits, a decrease of 5 per year.
The rapid expansion of magnesium demand cuts energy conservation and the healthy development of the new energy vehicle industry: The automotive emission standards are upgraded in 2019, and some cities in China have begun to implement the National Sixth Standard;
60,000 vehicles, an increase of 59 over the same period last year.
9% and 61.
Under the trend of environmental protection and energy saving, the demand for new energy vehicles and lightweight vehicles is more urgent, or it will open up the booming channel of the magnesium industry.
(3) Baosteel’s metal stock and micro-channel flat tubes have been steadily advancing to become the highlights of future performance. The company’s steady deployment of lightweight magnesium alloy vehicles has steadily advanced.
As a strategic partner, Baosteel Metal has a stake of 8%, which is conducive to accelerating the application of the company’s magnesium alloy products in automotive wheels and parts.
The company and Jianxin Technology and Hefei Xin plan to invest in the production and processing of 1 million automotive magnesium wheels per year; in India, invest in the construction of a 1 million die-casting parts and supporting magnesium alloy recycling project.
At the same time, the company lays out further processing downstream of the aluminum alloy industry chain.
Yangzhou Ruisile invested in the construction of a 1-insertion microchannel flat tube project.
After completion, it will effectively thicken the company ‘s performance; Chaohu Yunhai invested and built an annual output of 5 to build a large-scale aluminum alloy bar project. When it is in production, it is expected to achieve an annual net profit of 18.2 million;5 Tungsten carbide advanced aluminum alloy bar project, the annual net profit is expected to be 8497 after the production is reached.
3.Investment suggestion The company has a clear strategic layout in the lightweighting of magnesium alloy vehicles and downstream deep processing of aluminum alloys. Benefiting from the contraction of magnesium supply, the growth of magnesium prices, the rapid growth of downstream demand, and the expansion of new production capacity, its performance release will tend to stabilize.
The company’s downstream channels for magnesium alloys have expanded, and production expansion projects such as magnesium wheel (parts) and aluminum alloy flat tubes and rods have steadily advanced, and its future development space will also be expanded.
We expect the company’s EPS to be zero in 2019-2020.
54 yuan, 0.
63 yuan, corresponding to the PE of 2019-2020 is 17x, 15x, given a “recommended” rating.
Risk warnings 1) The price of magnesium and aluminum has fallen sharply; 2) The development of downstream new energy vehicles has fallen short of expectations; 3) The start-up of new projects has fallen short of expectations.