HAILIANG(002203) 广发证券·2024-09-06 07:39Investment Rating - The report gives a "Buy" rating for the company, with a target price of 10.78 CNY per share based on a 15x PE ratio for 2024 [4][43]. Core Views - Hailiang Co., Ltd. is a global leader in copper processing, continuously expanding production capacity and upgrading product structure. By the end of March 2024, the total production capacity will reach 1.28 million tons, with overseas capacity accounting for 36%. The company plans to add another 400,000 tons of new capacity in the future. Since 2019, the gross margin contribution from copper pipes has consistently exceeded 80%, with overseas sales gross margin reaching 49% in 2023. The company aims to become the largest copper foil producer globally by 2027, focusing on green manufacturing and accelerating new product development [2][3][10][21]. Summary by Sections Company Overview - Hailiang Co., Ltd. is a core subsidiary of Hailiang Group, established in 2001, and listed on the Shenzhen Stock Exchange in 2008. It is a leading manufacturer of copper pipes and rods, with products used in various industries including air conditioning, refrigeration, and electronics. The company operates 23 production bases globally and has established long-term relationships with nearly 10,000 customers across over 130 countries [10][11][12]. Production Capacity and Structure - As of March 2024, Hailiang's total copper processing capacity will be 1.28 million tons per year, with 36% of this capacity located overseas. The company plans to build an additional 400,000 tons of capacity, with production steadily increasing, reaching 850,000 tons in 2023 [13][15][17]. Financial Analysis - Hailiang's profitability is better than domestic peers, with a projected increase in earnings driven by global expansion and product upgrades. The company has a strong cost control capability and a stable profit model, which positions it well for future growth. The report forecasts net profits of 1.437 billion, 1.500 billion, and 1.635 billion CNY for 2024, 2025, and 2026, respectively, with EPS expected to be 0.72, 0.75, and 0.82 CNY per share [23][41][43]. Future Outlook - The company is focused on green manufacturing and aims to enhance its R&D capabilities to develop new products, particularly in the copper foil sector. Hailiang plans to leverage its existing R&D foundation to explore new market opportunities in emerging fields such as new energy materials and digital transformation [21][35][36]. Profit Forecast and Investment Recommendations - The report anticipates significant growth in Hailiang's copper processing output from 2024 to 2026, driven by recovering global demand and improved pricing. The company is expected to benefit from rising copper prices and an increase in processing fees, leading to enhanced profitability [41][43].