\u3000\u3000 Shanghai Huafon Aluminium Corporation(601702) (601702)
Core view
Event: the company announced on February 11 that it plans to raise no more than 1 billion yuan to invest in the high-end aluminum sector, strip and foil project for new energy vehicles.
Chongqing factory will build another 150000 tons of production capacity, and the scale of the company will increase by 30.6%. Following the IPO raised investment project – the construction of 200000 tons of production capacity of Chongqing plant, or reach the full production capacity in 2022, the company’s production capacity may be increased. It is proposed to invest 1.98 billion yuan in the construction of 150000 tons of production capacity of Chongqing factory, and the products are invested in high-end aluminum sector, strip and foil for new energy vehicles, of which no more than 1 billion yuan is proposed to be raised through non-public offering for the construction of the project.
The construction period of the project is about three years. At the end of the 14th five year plan, the company’s production capacity may reach nearly 500000 tons. According to the announced feasibility analysis report, the construction period of the project is about three years. If the company raises funds and the project progresses smoothly, the company’s production capacity may reach nearly 500000 tons at the end of the 14th five year plan.
New energy drives the expansion of aluminum heat transmission demand, and the market space of battery materials is broad. In terms of aluminum heat transfer materials, the demand for single vehicle of pure electric vehicle is about twice that of internal combustion engine vehicle. The improvement of new energy penetration provides broad development prospects for the company’s traditional business; In terms of new energy battery materials, the company’s products include battery shell, battery foil, aluminum-plastic film, etc. among them, battery shell is the flagship product of the business. At present, the supply is in short supply, and the processing fee is also rising. The proposed project will invest in aluminum sheet, strip and foil for new energy vehicles to actively embrace the broad market demand of new energy and lay a foundation for the company to increase market development and increase market share.
Release the three-year shareholder return plan, taking into account the long-term development of the company and the return of investors. According to the specific shareholder return plan of the company from 2022 to 2024, the profit distribution will comprehensively consider the development stage of the company and the arrangement of capital expenditure, and carry out the differentiation policy. The proportion of cash dividends in profit distribution is set at 20%, 40% and 80%; Among them, under the condition of cash dividend, the profit distributed in cash every year shall not be less than 15% of the distributable profit in the statement of the parent company realized in the current year.
Profit forecast and investment suggestions
It is predicted that the company’s EPS in 21-23 years will be 0.50, 0.74 and 0.86 yuan. According to the valuation of 17xpe of comparable companies in 22 years, the purchase rating will be maintained, and the target price will be 12.58 yuan.
Risk tips
The risk that the capacity release of Chongqing factory is less than expected, the risk that the processing fee of aluminum sector, strip and foil is less than expected, the risk that the industrial capacity is released too fast, the slowdown of macroeconomic growth and the risk of repeated global epidemics
