Main points of investment:
The second profit distribution, restart the market attention. It is worth noting that this profit distribution is the second profit distribution of the company since IPO in 2011. In 2014, the company's profit distribution plan is to distribute 2 yuan for every 10 shares, and then convert 10 shares into 15 shares. The original non-public offering shares were revised accordingly, the issue price was adjusted from 21.76 yuan per share to 8.63 yuan per share, and the maximum number of shares issued was adjusted from 28.2 million shares to 70.5 million shares.
The company upgraded to the blue ocean market. The company traditionally focuses on the production and sales of aluminum profiles. This increase will raise funds to invest in the production and construction project of energy-saving, environmental protection and high-performance aluminum alloy formwork with an annual output of 400000 square meters. Aluminum formwork is an emerging building material, a wide range of applications, in line with Belt and Road Initiative, national construction, environmental protection building materials and other strategic goals. It has excellent characteristics such as environmental protection, fast construction, wide use and recyclability, and has a strong substitution for traditional wood formwork.
Fixed increase locked for 3 years, optimistic about the long-term development of the company. Most of the objects of this non-public offering are related to the company, and the lock-up period is as long as 36 months, which shows that the management of the company has strong confidence in the future development of the company. Fund-raising projects can bring new profit growth for the company, and can better combine the previous fund-raising projects, give full play to the synergy, and bring great value to the company.
Set up M & A funds to cultivate the next golden egg of performance. The company and Feijun Capital jointly set up the Minfa Feijun M & A Fund, which will aim at high-end equipment manufacturing, industrial core and military industry, new materials enterprises and related industries of the Internet, cloud computing, big data, Internet of things enterprises to seek mergers and acquisitions, investment opportunities, cultivate the company's next performance golden egg.
Profit forecast and valuation. The company benefits from the infrastructure demand for highways, railways, ports and other facilities brought about by the state promotion of Belt and Road Initiative, which will bring a huge market growth space for the company, and the 40, 000 tons of aluminum profiles completed in May 2015 will be put into production, and sales are expected to increase by more than 25% in 2015. The increased funds will be used to invest in the production and construction project of energy-saving, environmental protection and high-performance aluminum alloy building formwork with an annual output of 400000 square meters. the project itself has a very high market value, and can absorb 10, 000 tons of aluminum profiles of the previous project every year, bringing synergy benefits for the company. In addition, the lock-up period is 36 months, which fully reflects the management's confidence in the company's long-term development. The establishment of M & A funds aimed at high-end equipment manufacturing, industrial 4.0 as the core and military, new materials enterprises and related industries in line with the national strategic planning of the Internet, cloud computing and other industries to invest, will incubate the company's next performance golden egg. We estimate that the diluted EPS for 2015-17 is $0.10,0.15 and $0.23 respectively (the total share capital is the share capital after the conversion, and assumes the impact of the successful increase on the equity). Give the company a 2015 price-to-earnings valuation of 200 times earnings and a buy rating corresponding to the target price of 20 yuan.
Risk hint. Downstream demand is insufficient, aluminum prices continue to fall, the increase will be rejected, the risk of mergers and acquisitions.
