\u3000\u3 China Vanke Co.Ltd(000002) 540 Jiangsu Asia-Pacific Light Alloy Technology Co.Ltd(002540) )
Event: on April 26, the company released the annual report of 2021 and the first quarterly report of 2022. In 2021, the operating revenue was 6.017 billion, a year-on-year increase of 50.81%, the net profit attributable to the parent company was 458 million, a year-on-year increase of 28.21%, and the gross profit margin was 14.46%; In 2022, Q1 achieved an operating revenue of 1.546 billion, a year-on-year increase of 17.06%, a net profit attributable to the parent company of 83 million, a year-on-year decrease of 7.54% and a gross profit margin of 13.49%.
Revenue continues to grow, and the turning point of profitability can be expected. In Q4 of 2021, the company realized a revenue of 1.75 billion yuan, with a year-on-year increase of about 23%. The gross profit margin of Q1 in 2022 decreased by about 1 percentage point compared with 2021. Among them, the expense rate of Q1 in 2022 was 7.2%, which was basically the same as that in 2021. The cost control of the company was excellent, and the decline of profitability was mainly due to the increase of the proportion of raw materials by about 7 percentage points. High growth of the company’s revenue: 1) the amount of aluminum used for single vehicle increases. According to the announcement, the company will supply 163000 tons in the automotive industry in 2021, with a year-on-year increase of 33%; 2) Expansion of some new customers; 3) The aerospace and air conditioning industry has increased demand for aluminum alloy materials. The company is under pressure in the short term, and the inflection point can be expected: 1) the price of bulk raw materials in China continues to rise, which affects some of the company; 2) Some logistics in China are affected; 3) Due to the launch of some new capacity, the capacity utilization rate is low in the short term. On the whole, the pricing mode of the company is still based on the situation of processing fees. The fluctuation of raw material prices has limited impact on the company and can be transmitted downward. With the expansion of new customers, the capacity utilization is expected to gradually improve and the turning point of profitability is expected.
In 2022, the company’s revenue is expected to maintain rapid growth, and the improvement of profitability can be expected. According to the announcement of the company, the sales volume of aluminum extrusion materials of the company in 2021 was 225900 tons, with a year-on-year increase of 32%, of which the main increment came from the three electricity system, heat exchange system and chassis body system of new energy vehicles. Thanks to the rapid growth of the company’s sales volume and its ability to deliver new cars in 2022, the company is expected to continue to benefit from high revenue growth. The company’s profitability is expected to improve in 2022: 1) further decline in expense rate; 2) With the gradual implementation of new production capacity, the shipment volume will continue to grow rapidly and the scale effect will be gradually reflected; 3) The deep processing capacity is gradually released, and the added value of products is expected to gradually increase; 4) The price of raw materials is expected to stabilize, and the pressure on the cost side is partially transmitted.
High quality customer structure and continuous expansion of production capacity. According to the company’s announcement, the company’s customers in the automotive lightweight industry cover more than 500 well-known auto parts and vehicle enterprises in the world, such as Bosch, mainland China, electric equipment, Valeo, Sanhua and Ningbo, and the supporting models cover new forces such as Weilai, ideal and Xiaopeng, Byd Company Limited(002594) , Geely, great wall and other strong independent brands, as well as Tesla, Volkswagen, BMW, Audi, Mercedes Benz, rivian, PSA and other foreign-funded vehicle enterprises; The aviation industry has entered the aircraft main engine factory under the aviation industry, the air conditioning industry has entered Dajin air conditioning, and the marine engineering industry has entered the ide in Israel. Continuous expansion of production capacity: according to the company’s announcement, the company’s “new expansion of 80000 tons of lightweight high-performance aluminum extrusion project” and “40000 tons of lightweight environmental friendly aluminum alloy project” have been completed and will be put into operation; The “65000 ton new energy vehicle aluminum project” has basically completed the equipment procurement and is about to enter the stage of equipment commissioning; At present, the construction progress of “aviation special aluminum materials and high-strength impact resistant aluminum alloy parts for new energy vehicles” is accelerating. According to the company’s announcement, the company’s aluminum extrusion production is expected to reach about 300000 tons by the end of 2022, and realize the scale layout of about 400000 ~ 500000 tons of high-performance aluminum extrusion production capacity and 3-5 million sets of aluminum parts production capacity of high-strength lightweight system in the next three to five years.
Investment suggestion: given the “Buy-A” rating, we expect the company to achieve an operating revenue of RMB 7.53/91.1/10.84 billion and a net profit of RMB 560 / 6.8/930 million from 2022 to 2024. The current share price corresponds to PE of 9.5/7.8/5.7 times. The first rating is “Buy-A”, and the six-month target price is 5.73 yuan / share.
Risk tip: the risk of intensified competition in the industry, the risk of price fluctuation of main raw materials and the risk of epidemic impact.
