It is suggested that the inquiry range is 13.3 to 16.6 yuan. We estimate that the fully diluted EPS of the company after the issue in 2013, 14 and 15 is 0.96,1.11 and 1.51 yuan (based on the total share capital of IPO after the issue of 25 million shares). Combined with the valuation of relevant companies in the same industry, and taking into account the uncertainty of the company's new capacity digestion and future international trade frictions, we believe that the reasonable inquiry range is between 13.3 and 16.6 yuan, corresponding to the price-to-earnings ratio of 12 to 15 times 2014.
Domestic aluminum car wheel overseas AM market leader. The company's main automotive aluminum alloy wheels, the products are subdivided into painting wheels, polishing wheels, electroplated wheels, vacuum plating wheels, mainly aimed at the international after-sales service (AM) market, international automotive aluminum wheels account for more than 95% of the income. The internal management model presents the characteristics of small batch, diversification, rapid research and development of new products, the company's product gross profit level is high, and the profitability of overseas business continues to improve.
The after-sale market space is huge, the consumption preference presents the diversification. The overseas after-sale aluminum wheel market is expected to sell 60 million pieces a year, with the company's market share less than 6 per cent. The market consumption preference presents many forms and different characteristics, such as dressing, maintenance, replacement, renewal and so on, which leads to more diversification, differentiation and beautification of products. The diversification of consumption orientation determines the small batch and customization of the production mode, which requires higher independent development and fast shipping ability of the manufacturers.
The company has a significant advantage in fine management. The company has a strong market demand for products and now has the rapid R & D capability of 20-30 new products in a single month. Compared with its competitors, the company has excellent performance in small batch production, fine management and customer stickiness, which has formed a more obvious market competitive advantage and become the key factor for the company to achieve a higher level of profitability.
The funds raised are mainly invested in capacity expansion and technology upgrading projects. (1) the project with an annual production capacity of 2.3 million pieces of aluminum alloy wheels for cast spin cars: it is expected that the project will be fully put into production by the end of 2014, when the production capacity will be increased by 2.3 million pieces, and the total production capacity will be increased by 65% compared with the current one. The new production capacity is conducive to the company's technological improvement and high-end product development. (2) R & D center construction project: the construction of R & D center project is expected to continuously enhance the leading advantage of the company's products in matching customer requirements.
The main risks are: (1) the risk of international trade disputes; (2) the risk of RMB exchange rate; (3) the risk of price fluctuation of aluminum ingots. (the share capital and diluted earnings per share predicted in the current report are based on the planned number of shares announced by the company, and there may be a risk of differences depending on the actual number of shares issued by the company.)