\u3000\u30 Fawer Automotive Parts Limited Company(000030) 38 Anhui Xinbo Aluminum Co.Ltd(003038) )
Anhui Xinbo Aluminum Co.Ltd(003038) : aluminum frame head enterprise, development speed up
The company was first established in 2007 and was first engaged in the business of building aluminum profile. In 2017, it began to involve in the deep processing of industrial aluminum profile, and the downstream focus shifted to photovoltaic and other industries. In terms of product structure, it gradually changed from aluminum profile to aluminum parts of deep-processing products. At present, the company is the head enterprise of China’s aluminum industry, and its downstream customers include Longi Green Energy Technology Co.Ltd(601012) , Jingke energy and other first-line photovoltaic module enterprises.
Aluminum frame: track growth and pattern optimization
The frame is one of the auxiliary materials of photovoltaic modules, which is used to enhance the strength of modules and facilitate the installation and transportation of modules. The material is mainly aluminum alloy. In terms of value, the single W value of aluminum frame is 0.14 yuan, which is higher than that of common auxiliary materials such as plastic film and glass. Aluminum frame has a large market space. At present, the market space is more than 40 billion. With the growth of photovoltaic demand, the market space is expected to reach more than 54 billion by 2025. The pricing mode is “aluminum price + processing fee”, which is highly dependent on working capital, which limits the expansion of a single enterprise. At present, the concentration of the industry is low, and the leading market accounts for less than 10%. With the development of the industry, the leading enterprises will further improve their scale and market share by virtue of capital and financing advantages, and the market concentration of aluminum frame is expected to increase.
Discussion on several key issues
(1) will the aluminum frame be replaced by other materials? We believe that in the foreseeable future, other materials do not have the basis to replace aluminum, and aluminum frame will still be the first choice for photovoltaic modules. (2) Where is the aluminum border barrier? We believe that the aluminum frame barrier is mainly reflected in two aspects: Capital Barrier & technical barrier (extrusion accuracy and surface treatment process). (3) The impact of rising aluminum prices? Based on the change trend of aluminum rod processing fee and the change of single ton profit of xinplatinum in 2021, we believe that the rise of aluminum price has little impact on single ton profit, and the gross profit margin may decline due to the influence of aluminum price base.
Capital advantage + rapid expansion of production, stepping into the fast lane of sound development
After the listing of the company, the capital strength and financing ability will be greatly enhanced, and the financing cost will be further reduced. At the same time, with the capacity expansion planning, the company’s future sales volume and market share will usher in a rapid increase. The company continues to invest heavily in R & D, with the R & D expense rate of 4.33% in 2021 and the R & D team expanding to 252, which is expected to further build the company’s long-term competitive advantage.
Profit forecast
The increase in the proportion of capacity release + aluminum frame drives the growth of revenue and profit: it is expected that the company will realize operating revenue of 4.671 billion yuan, 6.732 billion yuan and 8.959 billion yuan from 2022 to 2024, with a year-on-year increase of + 79.9%, + 44.1% and + 33.1% respectively; The net profit attributable to the parent company was 242 million yuan, 402 million yuan and 515 million yuan respectively, with a year-on-year increase of + 100%, + 66.3% and + 27.9% respectively. The current share price corresponds to the PE valuation of 29x, 17x and 13X from 2022 to 2024, which is covered for the first time and rated as “buy”.
Risk tips
Photovoltaic demand is less than expected, production expansion progress is less than expected, product substitution and aluminum price rise rapidly.
