Main points of investment

The decline in the growth rate of the downstream real estate industry intensifies competition in the construction aluminum profile industry. The company's main products are construction aluminum profiles and printing aluminum sheet, and the contribution of construction aluminum profiles to the company's gross profit is about 77%. The prosperity of the downstream real estate industry is the main factor affecting the company's performance.

At present, the growth rate of downstream real estate is declining, and the competition in the construction aluminum profile industry is intensified. In the first eight months of 2013, China's investment in real estate development totaled 5.2 trillion yuan, up 19.30 percent from the same period last year, down 1.2 percent from the previous month. The area of new housing starts in the previous August was 1.278 billion square meters, up 4 percent from the same period last year, down 4.4 percent from the previous month. The decline in the growth rate of the downstream real estate industry will lead to intensified competition for upstream construction aluminum profiles.

Product structure upgrading wins in the competition

In the face of the situation of declining growth rate and intensified competition in the downstream, the company firmly grasps the theme of new urbanization construction and energy-saving building action, mainly promotes energy-saving products, and continues to upgrade the product structure and extend the product line. rapidly expand the company's size and strength in order to win in the highly competitive market.

Profit Forecast and Investment rating: keep buying

We predict that the company will achieve net profit of 120 million yuan, 163 million yuan and 197 million yuan from 2013 to 2015, equivalent to 0.50,0.69 and 0.83 yuan per share respectively, an increase of 39%, 36% and 21% respectively over the same period last year, and the corresponding dynamic PE is 13 times, 10 times and 8 times respectively. As a leading manufacturer of energy-saving building aluminum profiles in China, the company will benefit from the promotion of the national urbanization process and the rapid development of indemnificatory apartment construction of government housing. We maintain the company's "buy" investment rating.