BAOWU MAGNESIUM(002182) 华泰证券·2025-04-27 09:08Investment Rating - The report maintains a "Buy" rating for the company with a target price of 14.27 RMB [7][8]. Core Views - The company achieved a revenue of 8.983 billion RMB in 2024, a year-on-year increase of 17.39%, but the net profit attributable to the parent company was only 160 million RMB, down 47.91% year-on-year, primarily due to unexpected declines in magnesium prices [1][2]. - The global magnesium production is expected to grow by 12% in 2024, leading to a significant oversupply and a projected 16% decrease in magnesium ingot prices to 19,759 RMB per ton [2][4]. - The company is positioned as a leader in the magnesium industry, with a robust production capacity of 100,000 tons of raw magnesium and 200,000 tons of magnesium alloy, alongside ongoing expansions [2][3]. Summary by Sections Financial Performance - In Q4 2024, the company reported a revenue of 2.636 billion RMB, a year-on-year increase of 26.20%, but a net profit of only 5.8688 million RMB, reflecting a 94.07% decline year-on-year [1][2]. - The company's main business revenue is expected to grow by 19.27% in 2024, while the gross margin is projected to decline by 1.75 percentage points [2]. Industry Positioning - The company is leveraging opportunities in automotive lightweighting, securing contracts with major automotive manufacturers for large magnesium alloy components [3]. - Collaborations with technology partners have led to the development of innovative magnesium alloy products, including a lightweight electric drive assembly and a new magnesium alloy robot [3]. Future Projections - The report projects earnings per share (EPS) for 2025, 2026, and 2027 to be 0.42 RMB, 0.67 RMB, and 0.94 RMB respectively, with significant downward adjustments of 55% and 54% for 2025 and 2026 EPS estimates [4][6]. - The target price is based on a price-to-earnings (PE) ratio of 34 times for 2025, reflecting the company's strong market position and growth potential despite current challenges [4][6].