\u3000\u3000 Jiangsu Asia-Pacific Light Alloy Technology Co.Ltd(002540) (002540)
Events
The company announced that the wholly-owned subsidiary Jiangsu Asia Pacific Hoffman Metal Printing Technology Co., Ltd. and Changzhou branch of Chongqing ideal Automobile Co., Ltd. signed the letter of intent for fixed-point suppliers, confirming that Asia Pacific Hoffman is the supplier of aluminum extrusion products for one of its two new energy models.
Brief comment
Extending from automotive aluminum extrusion to downstream deep processing is an important strategic layout of the company
At present, the company mainly supplies aluminum extrusions (semi-finished products) to the downstream as tier2 or Tier3 for thermal management, chassis, body and aluminum parts manufacturing of new energy three electricity system, with a market share of about 30% in China. Electrification has led to a significant increase in the consumption of aluminum extrusion materials per vehicle, superimposing the demand for efficiency and cost reduction in the supply chain of new energy vehicle enterprises. In response to customer demand, the company timely cuts into the downstream deep processing link of the aluminum extrusion industry chain. Asia Pacific Hoffman company, the ideal vehicle for this fixed-point, is the main body of Jiangsu Asia-Pacific Light Alloy Technology Co.Ltd(002540) Wuxi deep-processing business. It is expected that the fixed-point products may be body chassis beams, anti-collision beams and other components or assemblies, which are matched as Tier1 in the price per piece mode.
Deep processing expansion will create new growth space and speed up capacity expansion and customer expansion
The company has been deeply engaged in the automotive industry for more than 20 years. At present, it has entered the front-line main engine plants such as Volkswagen, Tesla and Weilai and the top tier 1 supply chain such as Bosch and Mainland China. It is expected to extend the industrial chain, improve profitability and upgrade customer service ability through the development and expansion in the field of deep processing of lightweight aluminum system components of new energy vehicles. At the end of 2021, the company announced that it planned to invest 580 million yuan to build a new energy vehicle lightweight aluminum parts project.
The automobile lightweight aluminum extrusion leader is optimistic about the profit reversal and valuation repair under the demand expansion
In 2022, the company’s production capacity may be released to 290000 tons, and the aluminum price is expected to stabilize. Superimposed on the improvement of production capacity utilization, product structure and operation optimization, the company’s profitability is expected to reverse. It is expected that the company’s net profit attributable to the parent company will be about 444 million yuan, 578 million yuan and 733 million yuan respectively from 2021 to 2023, corresponding to 18.3, 14.0 and 11.1 times of PE respectively, maintaining the buy rating.
Risk analysis: the project is not put into operation as expected, and the downstream demand and customer expansion are not as expected.
