产能加速扩张，将受益于镁合金应用增长

Investment Rating - The report maintains a "Buy" rating for the company [2][3][71] Core Views - The company's net profit attributable to shareholders decreased by 50% year-on-year in 2023, with revenue of 7.65 billion yuan, down 16% [1][6] - The decline in profitability is primarily due to the drop in magnesium prices, with the average price per ton falling from 30,655 yuan in 2022 to 22,234 yuan in 2023 [1][6][22] - The company is positioned as a global leader in the magnesium industry chain, currently in a phase of project construction and capacity expansion, which provides high profit elasticity to magnesium prices [2][71] Financial Performance Summary - In 2023, the company achieved revenue of 7.65 billion yuan and a net profit of 306 million yuan, with a significant drop in operating cash flow by 73.9% to 350 million yuan [1][6] - For Q1 2024, the company reported a revenue of 1.86 billion yuan, a year-on-year increase of 10%, and a net profit of 61 million yuan, up 19.9% year-on-year [1][6] - The gross profit margin for magnesium alloy products decreased from 29.14% in 2022 to 18.08% in 2023 due to lower magnesium prices [1][6] Future Outlook - The company forecasts net profits of 452 million yuan, 659 million yuan, and 812 million yuan for 2024, 2025, and 2026 respectively, with year-on-year growth rates of 47.5%, 45.9%, and 23.1% [2][71] - The report highlights the increasing applications of magnesium in solid-state energy storage, automotive components, and construction templates, indicating a positive outlook for the industry [2][68][71] - The company plans to expand its magnesium smelting capacity from 100,000 tons to 550,000 tons, which will enhance its profit elasticity to magnesium prices [15][41][43]