As of 13:28 on the 25th, Baowu Magnesium reported 18.02 yuan per share, up 3.03%. On the news side, Baowu Magnesium reported good results in the first quarter, with both operating income and net profit increasing.
According to the first quarter report of 2024 released by Baowu Magnesium on the evening of April 24, in the first quarter of 2024, the company achieved operating income of 1.864 billion yuan, a year-on-year increase of 10.03%, a net profit attributable to the parent company of 60.7193 million yuan, a year-on-year increase of 19.94%, a non-net profit of 60.4937 million yuan, a year-on-year increase of 32.73%, and a net cash flow from operating activities of 185 million yuan, a year-on-year decrease of 1.95%; During the reporting period, Baowu Magnesium's basic earnings per share was 0.0857 yuan, and the weighted average return on equity was 1.15%. For the reasons for the growth of net profit in the first quarter, Baowu Magnesium said: the sales volume increased in the reporting period, and the profitability of the product increased year-on-year.
Talking about other important matters: Baowu Magnesium's first quarterly report shows: 1. In January 2024, the company signed a strategic cooperation agreement with Shanghai Hydrogen Maple Energy Technology Co., Ltd., and the two sides will carry out in-depth cooperation in the production, manufacturing, processing and other links of magnesium alloy, the core raw material of magnesium-based solid-state hydrogen storage, and the two sides signed a strategic cooperation agreement, which is conducive to jointly promoting the development and expansion of magnesium hydrogen storage technology and application fields, enhancing the company's competitiveness and profitability, and consolidating the company's leading position in the industry. 2. In March 2024, Chongqing Boao Magnesium and Aluminum Metal Manufacturing Co., Ltd., a subsidiary of the company, signed a development agreement with an automobile manufacturer (limited to confidentiality requirements and unable to disclose its name) to jointly develop ultra-large magnesium alloy integrated die castings. The company works with universities and automobile customers to develop super-large magnesium alloy integrated die castings, which is the recognition of magnesium alloy integrated die castings by automobile customers, and is of great significance to the application and expansion of magnesium in the automotive field. This matter is in line with the company's long-term strategic development plan, which is conducive to expanding the company's future development space and enhancing the company's sustainable development ability.
Baowu Magnesium released its 2023 annual report on the evening of April 24, showing that in 2023, the company will achieve operating income of 7,651,808,922.43 yuan, a decrease of 15.96% compared with the same period last year, and a net profit attributable to shareholders of listed companies of 306,446,995.41 yuan, a decrease of 49.82% compared with the same period last year. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 302,524,460.99 yuan, a decrease of 47.15% compared with the same period last year. Due to the decline in the sales price of the company's products, the gross profit margin declined, and the performance decreased year-on-year. The main business income was 7,368,322,967.40 yuan, accounting for 96.30% of the total operating income, the other business income was 283,485,955.03 yuan, accounting for 3.70% of the total operating income, the domestic market operating income was 6,321,481,184.88 yuan, and the foreign market operating income was 1,330,327,737.55 yuan, accounting for 82.61% and 17.39% of the operating income respectively.
Talking about the operation of the industry in 2023, Baowu Magnesium said: in 2023, the global primary magnesium production capacity will be 1.63 million tons, the output will be 1 million tons, a year-on-year decrease of 9.9%, and the global magnesium consumption in 2023 will be about 1.05 million tons, a year-on-year decrease of 8.7%, and the mainland primary magnesium production capacity in 2023 will be 1.36 million tons, the primary magnesium output will be 822,400 tons, a year-on-year decrease of 11.9%, and the output of magnesium alloy will be 345,200 tons, a year-on-year decrease of 3.5%.
Baowu Magnesium 2023 Annual Report Introduction: The company is a high-tech enterprise integrating mining, non-ferrous metal materials and deep-processing products, and its main business is the production and deep processing of magnesium and aluminum alloy materials. The company's business is divided into three business segments: magnesium materials business, magnesium products business and aluminum products business. The company currently has a production capacity of 100,000 tons of primary magnesium and 200,000 tons of magnesium alloy. The company has built a new production capacity of 50,000 tons of primary magnesium in Chaohu, 100,000 tons of primary magnesium and 100,000 tons of magnesium alloy in Wutai, and 300,000 tons of primary magnesium and 300,000 tons of magnesium alloy in Qingyang.
The prospect of the future development of Baowu magnesium industry
Baowu Magnesium said: As a lightweight structural material and functional material, magnesium metal will play an important role in promoting green, low-carbon and high-quality development, and show greater achievements. At present, magnesium prices have returned to a reasonable range, cost-effective advantages have reappeared, and magnesium alloy has been innovatively applied more and more widely, which will usher in new opportunities in solid-state energy storage, automotive medium and large components and integrated die-casting large parts, building templates, etc. The "Work Plan for the Steady Growth of the Non-ferrous Metals Industry" jointly issued by the Ministry of Industry and Information Technology and other seven departments will list magnesium as a variety with large consumption scale and growth potential, encourage enterprises to explore the development of magnesium alloy building templates, and accelerate the development and promotion of integrated die-casting body, magnesium alloy wheels and other products. Encourage the export of deep-processed products such as magnesium products to enhance the added value of products. In its 2024 business plan, it mentions: 1. Promote the integration and deepening reform of Baowu Magnesium Industry 2. Improve the layout of the magnesium industry chain, promote the construction of key projects and improve the layout of the industrial chain, optimize the rhythm of the layout of new production capacity, effectively control the cost of resources and energy, improve the layout of processing technology paths, position the whole process of the industrial chain, and promote key projects: (1) comprehensively promote the Qingyang project. (2) Wutai 100,000 tons of raw magnesium and 100,000 tons of alloy project: Based on the northern market, we will steadily promote the construction of a new base for Wutai magnesium industry chain. (3) The ferrosilicon project is in full swing: stabilize upstream resources and control the cost of raw materials. (4) Promote the Chaohu Yunhai 50,000-ton raw magnesium project to be put into operation in the second half of 2024. 3. Build an original technological innovation platform for the magnesium industry and promote the development of the magnesium market
The historical price action of magnesium prices is as follows:
The magnesium ingots, which had been running strongly, ushered in a slight adjustment. According to SMM quotations, on April 25, the average price of magnesium ingot 9990 (Fugu, Shenmu) was 18,550 yuan/ton, down 150 yuan/ton from the previous trading day, an increase of 0.8%, and the average price was still up 7.54% compared with the average price of 17,250 yuan/ton on March 20. In late March, as the downstream enterprises of magnesium ingots exhausted the inventory of magnesium ingots hoarded at the beginning of the year, and at the end of March, downstream enterprises gradually began to enter the procurement, and the centralized large-scale procurement not only provided support for the rise of magnesium prices, but also made the magnesium plant from the early accumulation of the warehouse to the warehouse, the warehouse inventory of the magnesium plant was quickly lowered to a low level, and the sentiment of the magnesium plant in the early downturn was greatly recovered, and the willingness to raise the price was enhanced. However, considering the gradual resumption of production in the early stage of the magnesium plant, it is necessary to be vigilant against the risk of a rapid rise in magnesium ingot inventory. On the demand side, the downstream is more cautious about high-priced purchases, still focusing on on-demand procurement, and the overall demand has not improved significantly, considering that overseas orders will be gradually delivered in late April, which supports magnesium prices to bid farewell to the previous weak trend due to sluggish market demand.
According to SMM, magnesium export data in March is good, and many magnesium factories have responded that exports in April should also perform well. However, many market participants said that with the resumption of production of magnesium plants and the end of the procurement of centralized delivery of overseas orders in the early stage, there are no more bright spots in demand, which makes magnesium prices adjust.
Looking back at the trend of magnesium prices in 2023, it can be seen that taking the average price of magnesium ingot 9990 (Fugu and Shenmu) as an example, on December 30, 2022, the average price of magnesium ingot 9990 (Fugu, Shenmu) was 21,550 yuan/ton, and the average price on December 29, 2023 was 20,250 yuan/ton, with an annual decline of 6.03% in 2023. However, it is worth noting that the price of magnesium ingots will fluctuate frequently in 2023, which will hinder the wide application of magnesium ingots downstream to a certain extent.