Henan Mingtai Al.Industrial Co.Ltd(601677) (601677)
Event: on December 17, 2021, the company released the feasibility study report on the project of green new aluminum alloy materials with an annual output of 700000 tons. The total investment of the project is expected to be 4.47 billion yuan, including 2.86 billion yuan of construction investment and 1.62 billion yuan of initial working capital. The construction period of the project is expected to be two years. After reaching the production capacity, the operating revenue is expected to be 14.73 billion yuan, the net profit is 705 million yuan and IRR is expected to be 180 million yuan 3%, and the investment payback period is expected to be 7.3 years.
Expand the 700000 ton high-quality aluminum alloy material project and benchmark the production capacity structure of front-line enterprises. In the 700000 ton capacity structure, the total capacity of materials related to power batteries is 250000 tons, 100000 tons of automobile plate blank, 250000 tons of tank material, and 100000 tons of 5052 oxidation zone and plate. The overall capacity structure tends to the field of aluminum and high-quality foil related to new energy vehicles, which is improved compared with the existing capacity structure of the company. The core application scenarios can be benchmarked Shandong Nanshan Aluminium Co.Ltd(600219) Shenhuo aluminum foil and other first-line aluminum processing enterprises have brought about the upgrading of the company's production capacity structure.
According to the feasibility study, the profitability is stable to ensure the steady growth of the company's performance. According to the feasibility study report of the project, the revenue can reach 14.73 billion yuan after the project is completed. Based on the production and sales of 700000 tons, the income per ton of products is 21000 yuan / ton. The total net profit is 705 million yuan, corresponding to a net profit of 1007.14 yuan / ton per ton, and the net interest rate is 4.79%. Compared with the company's current performance, the average net profit per ton of aluminum processing products in 2020 was 1075 yuan / ton, and 1622 yuan / ton in the first three quarters of 2021. It is expected that after the implementation of the new project, the company will continue the high-quality expansion of production capacity and maintain the existing overall profitability.
It is expected that the capacity of nearly 2 million tons will be realized by the end of 2023, and the scale expansion will be accelerated. The construction period of the project is expected to be two years, corresponding to the completion by the end of 2023. The company's existing production capacity is about 1.3 million tons. After the new production capacity is put into operation, the company's aluminum processing scale will reach 2 million tons in advance, and has a scale of 1.4 million tons of recycled aluminum, laying a solid foundation for the company's production and sales scale of 2 million tons in 2025. Considering the continuous acceleration of the company's capacity expansion in recent years and the continuation of the high prosperity of the aluminum plate, strip and foil track, the company's subsequent capacity conversion to output is expected to speed up, which is expected to break through the scale bottleneck of 2 million tons by 2025.
Investment suggestion: as the leader of China's aluminum processing industry, the company has entered the field of intensive and deep processing through R & D drive and advanced equipment investment, so as to realize the product production line docking with the high growth sub track of aluminum processing materials. The increase of single ton processing fee and the high capacity utilization rate are expected to bring steady growth of performance. In addition, relying on the steady operation of the management and the sales department with high executive power, the company is expected to quickly realize its performance after the implementation of production capacity, reflecting its long-term competitive advantage. Under the control of the "dual control of energy consumption" policy, the company has actively laid a production line of recycled aluminum capacity, which is expected to realize the cost balance at the raw material end in the future. We expect that the company's net profit attributable to the parent company from 2021 to 2023 will reach RMB 1.940 billion, 2.480 billion and 2.995 billion, corresponding to 12.6, 9.9 and 8.2 times of PE respectively, maintaining the "buy" rating.
Risk warning: material price fluctuation risk; Market vicious competition risk; The risk of cash flow exceeding the expected fluctuation, and the landing of new production capacity is less than the expected risk
