Hailiang shares cut into the copper tube faucet of the copper foil race track and set sail again [agency review]

Cut into the copper foil track to create a dual main business of "copper tube" + "copper foil", covering and giving a "buy" rating for the first time.

The company has been deeply ploughing the copper processing field for more than 30 years, and the copper tube business: in the future, the production capacity will double, the industry prosperity will rise, and the company will reduce costs and increase efficiency, and the company's traditional business will return to high growth; in addition, the company has fully cut into the lithium copper foil business, and the new energy business is ready to start. We estimate that the company's net profit from 2021 to 2023 will be 13.08plus 17.22 / 2.447 billion yuan, corresponding to EPS 0.67 plus 0.88 plus 1.24, and the current share price will be 18.6 plus 14.2 per cent of PE, giving a "buy" rating for the first time.

The rest is the king: the demand for copper pipe is stabilizing and improving, and the deep reshuffle in the industry is going on.

Demand side: after the continuous "cold winter", the demand for copper pipe is expected to pick up. On the one hand, the promotion of the new national standard promotes the steady increase in copper pipe demand, on the other hand, new consumption areas such as construction, medical treatment and desalination are also blooming. Supply side: in the post-epidemic era, the industry is seriously divided, and the concentration is continuing to move closer to the head. In the past few years, some leading enterprises have suffered substantial losses, and the profits of small and medium-sized factories may be even more worrying, and the industry reshuffle is unprecedented. The company is still expanding against the trend and will become the "leftover king" of the industry.

Lithium copper foil ushered in the golden age, relying on the advantage of backwardness to speed up the layout.

"extremely thinning" lithium copper foil will be the mainstream trend in the future. The gap between supply and demand of very thin lithium copper foil will intensify, and the gap between rigid supply and demand will be difficult to make up in the short term. We expect the global gap to expand to 139300 tons by 2023. The company can give full play to the profound background of 30 years of development to form the ability to quickly cut into the lithium copper foil racetrack. It is estimated that the company's annual production capacity of lithium copper foil will reach 510 / 120000 tons respectively from 2023 to 2025, and the annual production capacity of standard foil will reach 30,000 tons in 2025.

Technology + scale + management turns to promote the company to continuously reduce cost and increase efficiency.

Technology: new production line technology + intelligent factory capacity production, single-line per capita cost reduction and efficiency space is expected to be further excavated. Scale: technological innovation will promote the production base to form a capacity of 100000 tons in the future, and the production cost is expected to be greatly reduced. Management: fine management enables long-term sustainable cost reduction, and the manufacturing cost per ton is expected to continue to decline.

Double production capacity + ton profit repair, performance is expected to usher in both volume and price rise

It is expected that the overall production capacity will double and the market share will continue to increase in 2025; on the one hand, the company will continue to achieve internal cost reduction, on the other hand, its processing fees are expected to pick up at the bottom in the future, and price increases plus cost reduction will promote a steady increase in profit per ton.

Risk tips: weak demand in the lower reaches of the industry; supply clearing is not as expected; the progress of new projects is not as expected.