\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 677 Henan Mingtai Al.Industrial Co.Ltd(601677) )
Key investment points
Deeply cultivate the aluminum processing link and become the industry leader with an annual output of one million tons. The company is a private enterprise mainly engaged in aluminum deep processing. After more than 20 years of intensive research on aluminum product processing technology, the company can produce about 47 kinds of alloy brands and more than 200 kinds of product specifications. It has developed into a leading enterprise in aluminum processing industry integrating scientific research, processing and manufacturing. The company is mainly engaged in the production and sales of aluminum sector, strip, foil and aluminum profile products. The products are widely used in transportation, new energy batteries, automobile manufacturing, food packaging and other industries. The company’s performance has maintained steady growth in recent years, and the compound growth rate of revenue and net profit attributable to the parent company from 2016 to 2021 reached 26.9% and 47.1% respectively. In 2021, the company’s performance improved significantly, with an operating revenue of 24.613 billion yuan and a net profit attributable to the parent company of 1.852 billion yuan, with a year-on-year increase of 51% and 73% respectively.
The use of recycled aluminum led by Baoji continues to improve its profitability. Under the “double carbon” strategic deployment, the replacement of recycled aluminum is an effective path for the aluminum industry to achieve energy conservation and emission reduction. According to the 14th five year plan, China’s output target of recycled aluminum in 2025 is set at 11.5 million tons, an increase of more than 55% over 2020. For the process of recycled aluminum, the technology of grade protection and utilization is an important way to enlarge the low-cost advantage of recycled application. In recent years, with the gradual improvement of the company’s capacity layout of recycled aluminum, the technology of grade protection and utilization is mature, and the cost of recycled raw materials is reduced and the efficiency is increased significantly; At the same time, realize energy matching and further reduce production costs. In terms of products, R & D supports the company’s high-end production capacity layout, and the products are gradually expanded to lightweight car body, aluminum foil for lithium battery, aerospace and 5g high-end fields. The improvement of efficiency promotes the gradual optimization of the company’s profit structure, and the contribution of net interest rate to ROE is gradually increased. In 2021, the company’s net profit margin on sales reached 7.7%, an increase of 4.6 percentage points over 2015.
The layout of high-end production capacity will be continuously improved and the space for high-end growth will be released. In the second half of 2021, the company’s high-end production capacity with an annual output of 500000 tons of superhard 3C materials phase I and Korea Guangyang aluminum have been put into operation; At the beginning of 2022, the renewable aluminum production line with an annual output of 700000 tons of green new aluminum alloy materials has been completed and put into operation; The construction of hot rolling and cold rolling equipment is expected to be completed before June. It is estimated that the sales volume of the company’s sector, strip and foil will reach 2 million tons in 2025, an increase of 75% compared with the sales level in 21 years. The continuous release of high-end production capacity will promote the further optimization of the company’s product structure, effectively improve the gross profit level per ton and open up growth space upward.
The industry concentration has increased, and the demand for high-end products has become prominent. At present, China’s high-end aluminum processing products are still mainly imported, and there is still a large market space in the field of high value-added. At the same time, in recent years, the concentration of aluminum processing industry has gradually increased, the competitiveness of high-end products produced by large enterprises has become prominent, and the market share has gradually increased. China’s current aluminum consumption is concentrated in the fields of construction, transportation and power electronics. Driven by the new energy market, the new consumption field of aluminum is prominent. The consumption increment of multiple consumption sectors represented by aluminum for new energy vehicles, aluminum for photovoltaic, aluminum foil for civil use and aluminum for green and low-carbon buildings is significant. In the future, it may become an important aluminum consumption field to replace the original construction consumption.
Performance forecast and investment suggestion with the release of the company’s high-end production capacity, the sales volume of aluminum strip and aluminum foil will increase steadily, and the processing fee is expected to increase gradually. We predict that the company’s revenue in 22-24 years will be 33.95 billion yuan, 38.764 billion yuan and 43.478 billion yuan respectively; The net profit attributable to the parent company was RMB 2.525 billion, RMB 3.074 billion and RMB 3.577 billion respectively; According to the comparable company’s 11.67 times PE in 2022, the company is given a target price of 30.47 yuan, and the company is given a “buy” rating for the first time.
Risk warning: the project progress is not as expected; Sharp decline in terminal demand; The risk of global epidemic recurrence.
