Performance report: in the first half of 2016, the company achieved operating income of 1.305 billion yuan, up 3.79% from the same period last year; the net profit belonging to shareholders of listed companies was 38.26 million yuan, down 20.07% from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 23.64 million yuan, down 47.74% from the same period last year.
The company's aluminum processing product structure transformation, improve product gross margin. The company's traditional aluminum processing business is mainly engaged in plate, strip, foil and other traditional aluminum. In 2014, the company acquired Shandong Xinheyuan Company to produce aluminum high-frequency welded pipes for downstream automobile industry radiator manufacturing. At present, the company focuses on adjusting the product structure. One is to adjust the sales proportion of air-conditioning materials and automotive alloy materials under the existing production capacity, and the other is to optimize orders in the field of traditional air-conditioning materials according to different product processing fees. In the first half of 2016, the aluminum processing business achieved an operating income of 1.25 billion yuan, 53.19% of the annual target, and a total profit of 59.37 million yuan. In addition, the company recently received information about Valeo's intended order. Valeo intends to give the company an order contract of not less than 12000,000,18,000 tons per year in the tender for 2017-2021. The proportion of the company's automobiles, air conditioners and other processing materials is increasing, which is conducive to the improvement of the company's product profits.
Clean business orders 723 million yuan on hand, and business revenue increased sharply in the second half of the year. In April 2015, the company acquired Shanghai Langmai Clean Technology Co., Ltd., entered the clean business industry, and implemented aluminum processing and big health two-wheel drive strategy. Shanghai Langmai mainly provides pharmaceutical companies with technical services for the overall solution of clean technology and pollution control. The company's clean business will develop horizontally and vertically in the future. Horizontally, it mainly extends from the field of pharmaceutical manufacturing to other fields such as electronics; vertically, it expands upstream and downstream. In the first half of 2016, the company's clean business achieved operating income of 55 million yuan and a total profit of-19.19 million yuan. This is mainly affected by the seasonal factors of project revenue recognition, as well as the rigid expenditure of costs.
Profit forecast and investment rating: we predict that from 2016 to 2018, the company will achieve a net profit of 168 million yuan, 211 million yuan and 226 million yuan, respectively, and the corresponding EPS will be 0.23,0.29,0.31 yuan respectively. Maintain an "overweight" rating on the company.
Risk Tip: aluminum price downside risk