BAOWU MAGNESIUM(SZ:002182) AVIC Securities·2024-04-29 01:30Investment Rating - The investment rating for the company is "Buy" [5] Core Views - The company has shown progress in deep processing and integration casting, particularly in the automotive sector, with significant collaborations for developing large-scale integrated casting components [2] - Despite a decline in revenue and profit in 2023, the company is expected to benefit from lower raw material prices and a shift towards high-value-added products, projecting revenue growth from 2024 to 2026 [30] Financial Summary - The company reported a revenue of 76.52 billion yuan in 2023, a decrease of 15.96% compared to 2022, with a net profit of 3.06 billion yuan, down 49.87% [5] - The projected revenue for 2024 is 96.94 billion yuan, with an expected growth rate of 26.69%, and net profit is anticipated to rise to 4.05 billion yuan, reflecting a growth rate of 32.03% [3][5] - Earnings per share (EPS) for 2023 was 0.43 yuan, with projections of 0.57 yuan for 2024 and 1.01 yuan for 2025 [3][5] Product Performance - The company has seen a significant increase in the proportion of deep processing products, with magnesium alloy deep processing products accounting for 38% of total revenue in 2023, up from 27% in 2022 [5] - The gross profit margins for magnesium and aluminum deep processing products were 18.1% and 12.4%, respectively, indicating a focus on improving product profitability despite market challenges [5] Market Context - The magnesium price has remained low due to weak downstream demand and reduced exports, with an average price of 22,200 yuan per ton in 2023, down 27.6% year-on-year [5] - The company is actively expanding its product structure to include high-value items such as dashboard supports and large magnesium castings, which are expected to enhance profitability [5]