Recommended logic: the company is the leading AM manufacturer in the domestic aluminum alloy wheel market, and its products are mainly aimed at foreign AM markets and have certain technical advantages, and are exported to more than 80 countries and regions such as Russia, Japan, the United States, Southeast Asia, Europe, the Middle East and South America. After the fund-raising project (annual production capacity of 2.3 million casting wheels and R & D center construction) reaches production (the production capacity of aluminum alloy wheels will reach 5.8 million), the company's product upgrading will improve product quality, reduce production costs, and improve product competitiveness and profitability.
International market space: the company's products are mainly used in markets such as automobile modification and maintenance. With the gradual increase of car ownership in the international market and consumers' pursuit of personalization, the demand for auto parts in the global AM market will continue to increase, with an expected annual compound growth rate of 2.25%. AM has a broad market prospect. Relying on international sales experience, channels and brand advantages, the company is expected to continue to expand its international market share.
Domestic market space: at present, the domestic market is mainly the production of matching motorcycle wheels, but with the substantial increase in domestic car ownership and the development of automobile culture in recent years, the domestic personalized demand for automobile wheels will increase, which will promote the demand of middle and high-end aluminum alloy wheels market to increase year by year, which is expected to reach 11.52 million pieces in 2017.
Company competitive advantage: as one of the largest export production enterprises of aluminum alloy wheels in China, the company has certain advantages in technology development, company management, customer resources and brand, etc., relying on the existing production technology advantages, after the investment in the R & D center construction of the fund-raising project, through the construction of talent team, new product research and development and technological innovation, it is expected to enhance the company's core competitiveness.
Profit forecast and investment advice: from 2013 to 2015, we expect the company's revenue to be 815 million, 936 million and 1.08 billion respectively, with a growth rate of 0.60%, 14.79% and 15.71% respectively, and net profit of 92 million yuan, 104 million yuan and 123 million yuan respectively, with growth rates of-3.08%, 13.37% and 17.97% respectively. Combined with the valuation of relevant domestic listed companies in the same industry, and taking into account the advantages of the company's leading position in the domestic AM market and the risks brought by international trade frictions and the uncertainty of new capacity digestion of fund-raising projects, the company is given a price-to-earnings ratio valuation range of 12-15 times, with a reasonable inquiry range of 16.68-20.85 yuan per share, corresponding to 14-17 times PE in 2013.
Risk tips: international trade frictions; international macroeconomic decline; exchange rate fluctuations; raw material prices fluctuate sharply.