Category: Money Tips Date: 2006-10-17
Property is being used by non-ferrous metals industry, the industry transition to new electronic materials industry: the company's tin metal and tin chemical products has been accounted for by the main profit of 14% in 2004 to 2006, around 40%. As the tin industry, the level of deep processing of the limits of IC BGA products have been put into the market, the product of the production capacity of 40 billion / month, the price roughly at 4000 ~ 10000 yuan / kg, small diameter products, gross margin as high as 50%, and earnings power is very strong, the company's goal is to BGA products achieving at least break even in 2007, 2008 and capacity utilization reached 50%. With the company's future lead-free solder, tin methyl tin organic products as well as BGA products to improve capacity utilization, the main deep-processed products account for more than 50% of the profits, the industry will be gradually converted into electronic properties of new materials; .. the company's profit mode will be changed periodically to the growth, that tin price fluctuations on the company's profit impact of a gradual decline: the company's future earnings growth was mainly dependent on the resources of self-sufficiency rate and the development of high value-added deep-processing products, due to the high prices of value-added products and tin prices linkage is less, the future with the company's deep-processed products, capacity expansion, the cyclical nature of corporate profits weakened, while highlighting the continued growth; .. To sum up, we believe, should be similar to the integration of Xiamen Tungsten and other deep-processing enterprises Tin perspective view of the future growth of shares of its reasonable valuation levels should also be much higher than other non-ferrous resources enterprises.
From the tin industry of view, mainly due to the lower reaches of tin in the electronics industry, domestic investment in fixed assets and the U.S. real estate investment is less demand on the tin, and lead-free solder and plastic heat stabilizer is conducive to the growth of tin consumption growth; from the supply analysis, due to the higher concentration of tin, as well as producing great powers the Indonesian government to private control of the small smelter, we expect 2007 will remain the world's tin supply gaps.
Growth in the next two years the company's performance is mainly reflected in the resource self-sufficiency rate and deep-processed products, capacity expansion of two aspects:
We expect that tin mine in Chenzhou, Hunan a project will be completed in 2007, 2008 is expected to reach 2,000 tons of tin ore products, and ultimately will reach the annual production of 5,000 tons; .. one of the company's convertible bonds is the technological transformation of mines , will increase to 5,000 tons of tin and 5,000 tons of fine copper concentrate mineral production; company's current tin timber and tin chemical production capacity have been set up to 2 million ton / year, and increased production capacity mostly lead-free solder, organic tin and other high added value products, deep processing of the product structure has been optimized, while BGA products will be profitable since 2007. Our conservative expects 06 ~ 2008, respectively tin timber sales reach 1.1 million tons, 13,000 tons and 1.6 million tons, tin chemical products sales were 0.8 million tons, 11,000 tons and 1.4 million tons.
Taking into account the 2006 change in export policy since the tin appreciation of the RMB and the company's development of deep processing, and we adjust the company's 06 ~ 2008 earnings forecast adjusted earnings per share were 0.396 yuan, 0.770 yuan and 1.020 yuan.
From the valuation on the analysis, based on the above property of the company's business model and profit change analysis, we believe that the company in 2007 to 20 times the dynamic price-earnings ratio is reasonable, that is a reasonable price from 15.4 yuan, the investment rating raised to buy. Please refer to our detailed analysis of the upcoming report on the investment value.
