BAOWU MAGNESIUM(SZ:002182) Minsheng Securities·2025-06-23 06:48Investment Rating - The report maintains a "Recommended" rating for the company [5]. Core Viewpoints - The company is positioned to benefit from the increasing demand for magnesium alloys in the automotive lightweighting sector, which is expected to experience significant growth [2][31]. - The magnesium-aluminum price ratio has dropped significantly, enhancing the cost-effectiveness of magnesium [1][11]. - The company has a comprehensive industrial chain covering mining, refining, and processing, which provides a competitive advantage [3][42]. Summary by Sections Magnesium Industry - Magnesium is a strategically important metal with a fully self-sufficient supply chain in China, unlike aluminum and iron, which have high external dependency rates [1][24]. - The magnesium-aluminum price ratio fell below 1 in March 2024 and has remained low, indicating a favorable cost position for magnesium [1][11]. - The automotive sector is the largest demand area for magnesium alloys, accounting for 70% of consumption, driven by the need for lightweight materials [27][31]. Company Overview - The company has significant resources, including extensive dolomite reserves and multiple magnesium production bases, which support its growth potential [3][42]. - Current projects aim to increase production capacity to 500,000 tons of raw magnesium and magnesium alloys [3][42]. - The company is expanding its product offerings in various applications, including automotive components, which are expected to see increased adoption [49]. Profit Forecast and Investment Suggestions - The company is projected to achieve net profits of 214 million, 478 million, and 639 million yuan for the years 2025, 2026, and 2027, respectively, with corresponding EPS of 0.22, 0.48, and 0.64 yuan [4][54]. - The price-to-earnings ratio (PE) is expected to decrease from 52 in 2025 to 18 in 2027, indicating potential for growth [4][54].