I. Overview of events
Recently, we conducted a field survey of Minfa Aluminum Industry and communicated with the management of the company on its current operation. The company's fund-raising project will be put into production in the second half of this year.
II. Analysis and judgment
The company is operating steadily, and the profit growth rate is expected to reach more than 20%.
The company's main products are industrial materials and building materials, with a current production capacity of 40,000 tons / year. Due to the limited transportation radius of aluminum, 52% of the customers are from Fujian Province, and 33% are from foreign markets such as Southeast Asia, Europe and South America. Despite the overall overcapacity in the aluminum industry, due to the large scale of the company and its superior geographical location in Fujian Province, the company has been developing steadily and its profit margin has increased steadily in recent years, and the profit margin is expected to grow by more than 0-30% this year.
Fujian aluminum bibcock, large-scale, downstream extension to improve product gross profit margin
The company's strategy is improved from the following aspects: 1. Deep processing: such as bathroom, computer shell, door and window processing, etc., the processing fee of this kind of products is high, but at present, the demand of cooperative customers is relatively small, and the order quantity needs to be further increased. 2. Regional expansion: looking for good M & An assets in the current relatively depressed market to assist the main industry to radiate to the whole country. In addition, if there are good projects abroad, corresponding acquisition actions will be taken. Generally speaking, the comprehensive gross profit margin of aluminum companies is about 10-15%, there are two ways to improve, one is large-scale, the other is downstream extension, but this is a long and arduous process.
The growth rate of real estate investment in Fujian Province continues to drive the company's product demand.
As more of the company's products are used in the real estate industry, the growth rate of real estate investment has a direct impact on the company's product sales. In 2013, the national real estate investment growth rate was 19.8%, and the investment growth rate in Fujian Province was 31.1%, which is at a high level, so the company's sales link is better. We expect that the growth rate of real estate investment in Fujian Province in 2014 will still be a strong boost to aluminum demand.
The infrastructure of the fund-raising project was completed in the first half of this year, and the performance began to be released in the second half of this year.
After the listing of the company, due to equipment selection, infrastructure and other factors, the implementation of the fund-raising project is slow. In 2013, the company adjusted the implementation plan of the fund-raising project in time. At present, the project is progressing smoothly. It is expected that all the fund-raising projects will be completed and put into production in the first half of 2014. It can be put into production in the second half of the year. Based on the capacity utilization rate of 20, 000 tons in half a year, it is expected that the new output in the second half of the year will be about 16000 tons.
Third, profit forecast and investment suggestions
The company is a leading enterprise of aluminum profile processing in Fujian Province. The fund-raising projects focus on volume in the second half of this year, and the performance will usher in an explosive period. In view of the stability of the company's downstream customers and the release of production capacity, the company maintains its "cautious recommendation" rating, with an estimated EPS of 0.33,0.45 and 0.58 yuan respectively from 2013 to 2015, with a share price of 35, 26 and 20 times the corresponding share price.
IV. Risk hints
The rate of new housing starts is falling; fundraising projects are not on schedule.
