Yunlu Materials(SH:688190) Hua Yuan Zheng Quan·2024-07-29 23:00Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage in this context [9][15]. Core Insights - The company is a leader in the amorphous alloy sector, benefiting from increased domestic investment in power grids and favorable overseas market conditions. The introduction of nanocrystalline alloys and powder cores is expected to open new growth avenues, while amorphous motors are anticipated to become a new highlight [10][56]. - Revenue projections for the company are estimated at 1.908 billion, 2.086 billion, and 2.255 billion yuan for 2024, 2025, and 2026 respectively, with net profits expected to be 356 million, 409 million, and 529 million yuan for the same years [10][15]. Summary by Sections 1. Company Overview - The company specializes in the production of amorphous alloys, nanocrystalline alloys, and magnetic alloy powders, with applications in power transmission, new energy vehicles, wireless charging, and various other sectors [56]. - The company has a designed annual production capacity of 90,000 tons, making it the largest supplier of amorphous alloy strips in the industry. Sales volume increased from 52,000 tons in 2021 to 87,000 tons in 2023, with overseas revenue rising from 320 million yuan to 730 million yuan during the same period [10][12]. 2. Amorphous Alloys - Amorphous alloys are high-performance soft magnetic materials primarily used in distribution transformers. Compared to traditional silicon steel, amorphous transformers offer significant energy-saving advantages, especially in low-load scenarios [10][39]. - The domestic market for amorphous alloys is expected to grow steadily, with demand projected to reach 1.72 billion, 1.94 billion, 2.15 billion, and 2.39 billion yuan from 2023 to 2026 [81]. 3. Nanocrystalline Alloys and Soft Magnetic Powder Cores - Nanocrystalline alloys are expected to replace traditional ferrite soft magnets in applications such as wireless charging and new energy vehicles, with a projected revenue growth rate of 13%, 11%, and 17% from 2024 to 2026 [16][21]. - The global market for soft magnetic powder cores is anticipated to reach 4.59 billion, 6.56 billion, 8.27 billion, and 10.01 billion yuan from 2022 to 2025, with a CAGR of 29.7% [10]. 4. Financial Projections and Valuation - The company’s net profit is projected to grow from 356 million yuan in 2024 to 529 million yuan in 2026, with corresponding PE ratios of 22x, 19x, and 15x [15][20]. - The report compares the company’s valuation with peers, indicating that the average PE for comparable companies is higher, suggesting potential upside for the company’s stock [15].