BAOWU MAGNESIUM(SZ:002182) Capital Securities·2024-10-31 06:41Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company achieved operating revenue of 6.347 billion yuan in the first three quarters of 2024, a year-on-year increase of 14.09%, while the net profit attributable to shareholders decreased by 25.88% [2] - The persistent low magnesium prices have negatively impacted the company's performance, with the average price of magnesium ingots down 17.22% year-on-year as of October 25, 2024 [2] - The company is advancing its Qingyang project and expanding downstream applications, which are expected to become new profit growth points [2] - The investment suggestion indicates that with the gradual production of new projects, the company's original magnesium and deep processing capacity is expected to increase significantly [2] Summary by Sections Financial Performance - In Q3 2024, the company reported operating revenue of 2.271 billion yuan, a year-on-year increase of 11.86% and a quarter-on-quarter increase of 2.68%. The net profit attributable to shareholders was 34 million yuan, down 60.55% year-on-year and down 42.49% quarter-on-quarter [2] - The company’s gross profit margin for magnesium alloy products was 14.31% in the first half of the year, despite the low magnesium prices [2] Project Development - The Qingyang project is progressing steadily, with the successful completion of the third tunnel of the Anhui Baomei mineral product transportation corridor on September 5 [2] - The company has partnered with Suzhou Huichuan Power to launch magnesium alloy lightweight electric drive assemblies, which are expected to be significant growth points in the automotive sector [2] Future Projections - The company’s revenue projections for 2024-2026 are 8.387 billion yuan, 12.314 billion yuan, and 21.733 billion yuan, respectively. The net profit attributable to shareholders is projected to be 203 million yuan, 626 million yuan, and 1.007 billion yuan for the same period [3] - The earnings per share (EPS) are expected to be 0.29 yuan, 0.88 yuan, and 1.42 yuan for 2024, 2025, and 2026, respectively [3]