HUAYOU COBALT(603799) 东吴证券·2024-04-21 23:30Investment Rating - Buy (Maintained) [1] Core Views - The company's nickel smelting capacity release and high shipment growth are expected to drive profit improvement in 2024 due to rising metal prices [1] - The precursor business achieved a 31% year-on-year shipment growth in 2023, with a market share increase, and is expected to grow by over 30% in 2024 [3] - The cathode material business grew by 5% in 2023 and is expected to grow by over 25% in 2024 [3] - The Huafei project is expected to contribute significantly in 2024, with nickel price increases driving unit profit recovery [4] - Rising copper prices are expected to significantly enhance the profitability of the copper business in 2024 [4] Financial Performance - In 2023, the company achieved revenue of RMB 66.304 billion, a year-on-year increase of 5.19%, with net profit attributable to the parent company of RMB 3.351 billion, a year-on-year decrease of 14.25% [3] - In Q1 2024, the company achieved revenue of RMB 14.963 billion, a year-on-year decrease of 21.7%, with net profit attributable to the parent company of RMB 522 million, a year-on-year decrease of 48.99% [3] - The company's operating cash flow in 2023 was RMB 3.486 billion, a year-on-year increase of 19.63%, while investment cash flow was RMB -16.551 billion, a year-on-year increase of 32.05% [17] Business Segments - Precursor business: Shipments in 2023 were 129,000 tons, a year-on-year increase of 31%, with revenue of RMB 10 billion and a gross margin of 18% [3] - Cathode material business: Shipments in 2023 were approximately 95,000 tons, a year-on-year increase of 5%, with revenue of RMB 18.9 billion and a gross margin of 7.8% [3] - Nickel business: Shipments in 2023 were approximately 126,000 tons, a year-on-year increase of 88%, with revenue of RMB 6.8 billion and net profit of RMB 930 million [4] - Copper business: Shipments in 2023 were 88,000 tons, a year-on-year decrease of 2%, with expected net profit of over RMB 500 million [4] - Cobalt business: Shipments in 2023 were 41,000 tons, a year-on-year increase of 12%, achieving a break-even [4] - Lithium business: Shipments in 2023 were 8,235 tons, a year-on-year increase of 104%, achieving a break-even [4] Profit Forecast and Valuation - The company's net profit attributable to the parent company is expected to be RMB 3.529 billion in 2024, RMB 4.578 billion in 2025, and RMB 5.741 billion in 2026, with year-on-year growth rates of 5%, 30%, and 25% respectively [4] - The company's EPS is expected to be RMB 2.06 in 2024, RMB 2.68 in 2025, and RMB 3.36 in 2026 [2] - The company's P/E ratio is expected to be 14x in 2024, 11x in 2025, and 9x in 2026 [4] Market Data - The company's closing price is RMB 29.65, with a price-to-book ratio of 1.52 and a total market capitalization of RMB 50.704 billion [5] - The company's net asset per share is RMB 19.54, with a debt-to-asset ratio of 64.58% [6]