On Friday, Yunhai Metal once again set an all-time high in intraday trading. Yunhai Metal's share price has continued to rise since late August, rising 86.03% in nearly a month as of Friday's close, and has risen for five consecutive days in recent days.
Yunhai Metal is mainly engaged in magnesium, aluminum alloy materials and deep processing products business, mainly used in the automotive and consumer electronics fields. In the first half of the year, the company achieved an operating income of 3.5982051 billion yuan, an increase of 42.70 percent over the same period last year, and a net profit of 142.2686 million yuan belonging to the parent company, an increase of 46.68 percent over the same period last year. The company pointed out that it was mainly due to the increase in sales of main products, the increase in magnesium prices, and the increase in government subsidies compared with the same period last year.
According to the semi-annual report of Yunhai Metal, the company already has an annual production capacity of 100000 tons of raw magnesium and 180000 tons of magnesium alloys. We are going to build an annual production project of 300000 tons of high-performance magnesium-based light alloys and 150000 tons of magnesium alloys in Chizhou, Anhui Province. In 2021, the company acquired a 100% stake in Tianjin Liuhe magnesium products Co., Ltd. to add a new production base for automotive lightweight parts in the north.
The so-called "automobile lightweight" means to reduce the vehicle equipment quality as much as possible under the premise of ensuring the strength and safety performance of the vehicle, so as to improve the power performance of the vehicle and reduce fuel consumption. it is especially important in the environment of energy saving and environmental protection. In recent years, with the gradual spread of new energy vehicles, consumers continue to put forward higher requirements for power battery mileage. On the one hand, manufacturers use better battery materials and technology, on the other hand, reducing the overall weight of cars has also become one of the research topics of automobile companies. Because the density of magnesium alloy is very low, it can effectively reduce weight as mechanism parts or automobile parts, and its effect on automobile lightweight is very obvious. at present, the proportion of magnesium alloy components applied to magnesium alloy is gradually increasing, whether it is traditional automobile or new energy automobile.
The fundamentals of the magnesium market are bright, and the performance of related stocks has benefited. Apart from Yunhai Metal, Wanfeng Aowei achieved revenue of 5.547 billion yuan in the first half of the year, an increase of 25.44% over the same period last year, and non-net profit of 166 million yuan, an increase of 22.32% over the same period last year. Wanfeng Owei is mainly engaged in the lightweight industry of automotive metal parts and the navigable aircraft manufacturing industry. The company achieved sales revenue of 4.756 billion yuan in the first half of the year, an increase of 33.60% over the same period last year, of which magnesium alloy business increased by 36.46%.
Magnesium prices have continued to rise since the beginning of this year, and driven by tight supply of raw material ferrosilicon and downstream demand, a rapid rally began again in August. Ferrosilicon prices hit new highs frequently, rising to 12462 yuan / ton at one point on Thursday, a monthly increase of 36.55%. Shenyin Wanguo Futures recently pointed out that although the promotion of the crude steel production policy and the suppression of magnesium ingot and crude steel production by the consumption control policy will weaken the performance of the demand side, however, the consumption control policy in Ningxia is stricter, the production restriction policy in Shaanxi is on the ground, and there is also the possibility of introducing a consumption control policy in Qinghai, and the output of ferrosilicon will fall to some extent. On the whole, the tight supply pattern of ferrosilicon market may continue, and the market price is easy to rise and difficult to fall.
In terms of downstream demand, the recent 78th International magnesium Association World magnesium Conference, Australia's CM Consulting Company said that in 2021, the magnesium market recovered significantly and prices rebounded. Global magnesium consumption is expected to grow by 8% this year, of which magnesium consumption in China is expected to grow significantly by 11%. Looking ahead, CM believes that global demand for magnesium will continue to grow in the next 10 years, with an average annual growth rate of 5.2% over the past decade, slightly higher than in the previous decade.
The rise in magnesium prices has also led to higher magnesium alloy prices. Yunhai Metal recently said on the investor interactive platform that with the rise in the original magnesium price, the company's magnesium alloy price has also increased compared with the same period last year. Compared with the same period last year, the increase is larger. And the raw magnesium of the company is self-produced, the production cost of raw magnesium increases with the rise of raw materials, but the rise of magnesium price is higher than the cost, so it has a positive impact on the company.
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