Investment logic
Minfa Aluminum is an aluminum profile processing enterprise in Fujian Province. It has participated in financial enterprises such as small loan companies. Its business is mainly aluminum construction profiles, with industrial profiles accounting for more than 20% and exports accounting for about 15%. The company has a certain accumulation in technology, and has the regional advantages of Hercynian development, Fujian free trade zone and the starting point of Belt and Road.
The company's aluminum profile business to volume premium, profits are expected to be stable. The company completed its IPO investment project in 2014, increasing its production capacity to about 80, 000 tons and producing 55000 tons in 2014, which we expect to increase by about 25% in 2015. However, due to fierce competition in the industry and falling processing fees, the profitability of aluminum profiles continues to decline. Overall, the profits of the company's aluminum profile business will tend to be stable.
Plan to issue additional shares to enter the aluminum template business and seize the market. Aluminum formwork market, a new industry in building materials, is still in its infancy; with the introduction of industry norms, the emergence of national policies and the promotion of leading enterprises, and the exertion of the comprehensive cost advantages of aluminum formwork, the aluminum formwork market will enter a period of rapid growth, and the company is expected to take the lead in occupying the market. As the aluminum template business has a certain customer stickiness, differentiation and barriers to entry, its profitability is expected to be much stronger than aluminum profiles, it can be expected that the company's main business will return to growth driven by the aluminum template project.
Participate in M & A funds and catch the express train of emerging industries. The company is actively expanding, partnering with Fijun Capital to set up a M & A fund aimed at high-end equipment, industrial 4.0 and the Internet, which is expected to catch the express train of these emerging industries and add another fire to the company's development.
Profit forecast and investment suggestion
We estimate that the company's performance from 2015 to 2016 will be 0.25yuan and 0.35yuan respectively, and the PE level of the corresponding share price will be 113x and 82x respectively. We believe that the combination of endogenesis and extension, the company has a good growth, at present, the company's stock price is not far from the IPO price (21.76 yuan), there is a certain margin of safety, therefore, we give the company a "buy" rating.
Stock price catalyst: the company's extension project has made progress, the company has made progress in additional issuance, aluminum template policy has been introduced, and customer development is active.
Risk tips: exchange rate changes, anti-dumping and export tax rebate policy change risk, company production capacity release is less than expected, aluminum price change risk and so on.
