Main points of investment
Matters: the company released its semi-annual report, with operating income of 887 million in the first half of the year, an increase of 15.96% over the same period last year, and a net profit of 27.52 million belonging to shareholders of listed companies, an increase of 1077.86% over the same period last year.
Peace viewpoint:
Performance bottomed out: the company's operating income grew steadily in the first half of the year compared with the same period last year, while gross profit reached 11.74%, an increase of 6.5 percentage points over the same period last year, and net profit bottomed out. We believe that the company's overall gross profit margin has increased for the following two reasons: (1) the company's product structure has changed, of which the sales of polymetallic composites with a gross margin of about 30% increased by 95.87% compared with the same period last year. (2) the quality rate of new production capacity is gradually increasing. We expect that the above factors are still likely to develop in a good direction in the future, and the company's profitability will continue to recover.
With the continued consolidation of its market position, mobile phone shell, Tesla, Inc. and military orders have become new highlights: the company's aluminum and steel composite materials have a market share of more than 50% in the domestic power plant air cooling industry. At present, the company is already the largest manufacturer of this material in the world, and its market share is still expected to increase in the future. In addition, the company is actively expanding new business areas, and new attractions are frequent. For example, the aluminum-stainless steel composite material for the back cover of mobile phones produced by the company has cooperated with Huawei, OPPO, Meizu and other well-known mobile phone brands, and the first mobile phone using this material has been put on the market in large quantities. The new alloy developed by the company for Tesla, Inc., a well-known new energy automobile company, has also begun mass production. In the military business, lightweight protective materials are also expected to receive bulk orders this year. The new markets that the company strives to open up have broad space, and its future development is worth looking forward to.
Subsidiary Fei'erkang provides 31 3D printing parts for the first flight C919: Fei'erkang is a leading domestic R & D and production enterprise of 3D printing technology, and is now an official qualified batch supplier of 3D printing parts of Comac. During the reporting period, the domestic large aircraft C919 completed its maiden flight. Feierkang, as the only supplier of metal 3D printing parts for C919, provided 31 metal 3D parts for each C919. In the future, once C919 enters mass production, it will bring a lot of business income for Fei'erkang.
Investment advice: capacity commissioning, aluminum price decline and other unfavorable factors have dissipated; the company's product sales growth is in line with expectations, we maintain the company's performance inflection point has reached the judgment. It is expected that the company's EPS from 2017 to 2019 will be 0.16,0.26 and 0.34 yuan respectively, corresponding to the current share price of 60 times, 38 times and 29 times, respectively, maintaining a "recommended" rating.
Risk tips: (1) the price of aluminum raw materials has fallen sharply; (2) military orders are lower than expected.