Core ideas:
Event: in the first half of the year, the company realized income, slipped net profit and deducted non-return net profit of 1.3 billion yuan, 38 million yuan and 24 million yuan respectively, with year-on-year changes of 3.8%,-20% and-48% respectively, and realized EPS of 0.057 yuan. 2) the company receives the customer Valeo intention order information and intends to give the company a contract order of not less than 1.2-18000 tons per year from 2017 to 2021, subject to the formal contract.
The settlement cycle of medical business leads to the decline of the company's performance.
In the first half of the year, Longmai realized a net profit of-14.95 million yuan, a net profit of 6.91 million yuan in May-June last year, and a net profit of 77.98 million yuan in May-December. It can be seen that Longmai's settlement is usually in the second half of the year, according to the promise made when purchasing Longmai at that time, Longmai's net profit in 2016 is not less than 87.9 million yuan, that is, Longmai or contribute about 100 million yuan in the second half of the year.
Benefit from the general trend of lightweight cars
1) the transformation of products to the automotive field: the company's aluminum foil products are mainly used in air conditioners and automobiles, mainly in air conditioners (about 75000 tons per year). However, the sales volume of automobile materials is growing rapidly (2.1,3.2 and 36000 tons respectively in 13-15 years, accounting for 22%, 28% and 33% respectively). The production and marketing target of automobile materials in 16 years is 45000 tons. The proportion of sales will increase to 38%. 2) Automotive products extend downstream: through the subsidiary Shandong Xinheyuan Company's automotive product industry chain to high value-added aluminum high-frequency welded pipes (mainly used in the production of automotive radiators); 3) large orders or further growth: the company's customer Valeo intends to give the company a contract order of not less than 1.2-18000 tons per year in 2017-2021 (9000 tons of aluminum in 11-16 years), subject to the formal contract.
Investment suggestion
It is estimated that the company's EPS in 16-18 years is 0.28,0.34 and 0.41 yuan respectively, and the previous share price PE is 34 times, 28 times and 23 times respectively, giving a "buy" rating.
Risk hint: the project schedule is lower than expected and the downstream demand is lower than expected.