I. Overview of events
The company's operating income in the first half of 2016 was 458 million yuan, down 11.93 percent from the same period last year; the net profit belonging to shareholders of listed companies was 6.8575 million yuan, down 54.68 percent from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 5.6854 million yuan, down 36.51 percent from the same period last year.
II. Analysis and judgment
Actively transform the middle and high-end aluminum market
The company is an aluminum processing industry, in the lower reaches of the aluminum industry, the industry concentration is not as good as the upstream, and the competition is fierce. Through the adjustment of product structure, the management of the company actively develops the market of high-end industrial aluminum profiles on the basis of consolidating the field of building aluminum profiles. The company has increased its R & D investment in recent years, and the proportion of R & D expenses in business income has continued to increase, accounting for 4.11% in the first half of the year. The continuous R & D investment has made the company a leader in aluminum alloy building profiles and industrial profile processing technology.
The fund-raising project has high added value and good profit prospect.
The company raised investment 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", which has not yet been formally approved by the China Securities Regulatory Commission. As of June 30, 2016, the company has invested more than 45 million yuan in the project. According to the company's plan, the construction period is expected to be 1 year, and the production will be fully reached after 3 years of commissioning. It is expected to achieve an average annual operating income of 520 million yuan, and an average annual net profit of about 90 million yuan after full production.
Production and sales are expected to continue to increase
Operating income declined in the first half of the year, but production and sales increased by about 12%, mainly due to the decline in processing fees, depreciation fees, management fees and so on. With the arrival of the peak sales season in the second half of the year, production and sales are expected to continue to pick up; at the same time, if the fixed increase project is formally approved by the China Securities Regulatory Commission, the company will speed up the implementation of the project and increase the added value of the products, the overall profitability of the company will be greatly improved.
Third, profit forecast and investment suggestions
According to our analysis of the future development of the industry and the company, it is estimated that the EPS will be 0.03,0.09,0.17 in 2016-2018, and the corresponding PE will be 281,103,59, with a "cautious recommendation" rating.
Fourth, risk tips:
The production of the new project fell short of expectations, and the processing fee declined.
