Company profile:
The company is mainly engaged in engineering design and consulting, engineering and construction contracting, equipment manufacturing and trade business.
The controlling shareholder of the company is Chinalco, which controls 85% of the shares before the issuance of the company; the actual controller is the State-owned assets Supervision and Administration Commission of the State Council.
Current situation and prospect of the industry
The national economy has developed continuously and healthily. China's economy is still in the channel of stable development, and the macro-economy has been improving for a long time. During the 12th five-year Plan period, China's national economy maintained a good situation of steady and rapid development. The growth of the national economy, the improvement of the level of urbanization and the improvement of residents' consumption level have promoted the growth of domestic fixed assets investment and the development of non-ferrous metals and construction industry, creating market demand for this industry.
The prosperity of the non-ferrous metals industry has improved. Although China's economy experienced a complex and changeable situation at home and abroad, it still achieved steady growth in 2017, with its gross domestic product (GDP) growing by 6.9% over the previous year. Through the implementation of a number of macro policies with supply-side structural reform as the core, we will promote economic transformation and development, and constantly strengthen the driving force for growth. As a cyclical industry, non-ferrous metals have maintained the momentum of stability and improvement. The output of ten non-ferrous metals for the whole year was 53.78 million tons, an increase of about 1.79 percent over the same period last year. With the improvement of the market environment, the output of some varieties has declined, but demand has increased, and prices have increased significantly; domestic copper and aluminum consumption has increased by 5% to 8% for the whole year; profits of non-ferrous metal industrial enterprises above scale have increased by more than 30% compared with the same period last year. Aluminum smelting industry (including alumina, electrolytic aluminum, recycled aluminum, etc.), which has made losses for several years in a row, has made profits, which has played an important role in improving the efficiency of the industry.
Highlights of the company:
Leading enterprises in the subdivision field of non-ferrous metal engineering. Chinalco International has advanced technology and strong ability to carry out continuous technological innovation in the non-ferrous metals industry, and can provide comprehensive technical and engineering design services for all kinds of business in the whole non-ferrous metals industry chain. Chinalco International plays a leading role in the field of engineering design consulting in China's non-ferrous metals industry, actively presides over or participates in the formulation of national standards and industry design codes, and further enhances its popularity and influence in China's non-ferrous metals industry. In addition, the company actively seeks opportunities to cooperate with famous universities and scientific research institutions to jointly develop new technologies. Over the years, Chinalco has established long-term and stable cooperative relations with world-class research institutions such as Alcoa, University of Auckland Light Metals Research Center, R&Dcarbon in Switzerland, University of Melbourne, Central South University, Northeastern University, University of Science and Technology Beijing, Institute of Automation of the Chinese Academy of Sciences and so on.
The company ranks high in the field of international engineering design, and ranks first in the field of non-ferrous metal engineering construction in China in the 2017 selection of "Top 150th Global Engineering Design companies", "Top 225th International Engineering Design companies" and "Top 250Global Engineering contractors".
Fund-raising project
1. It is proposed to use the raised capital of 979.6 million yuan to supplement the working capital of the project general contracting business.
Main potential risks
The risk of changes in the macroeconomic cycle. The company's business operation is highly dependent on the investment and construction of non-ferrous metals, civil construction, municipal public utilities and other industries. If the growth rate of China's national economy slows further or there are periodic sharp fluctuations in the macro-economy, and the company fails to have reasonable expectations and adjust its business behavior accordingly, it will have an adverse impact on the company's operating conditions.
The risk of the impact of macro-control policies. The macroeconomic policies on industry and finance implemented by the Chinese government, such as credit and financing, local government debt financing, approval of new projects, restrictions on capacity expansion, environmental protection and foreign investment, will have a significant impact on China's non-ferrous metals, engineering construction, municipal utilities and other industries. Such macroeconomic policies may seriously reduce the level of construction activities and capital investment expenditure, which will have a significant adverse impact on the company's business and financial performance.
Valuation
The issuer works in the civil engineering and construction industry, and as of July 25, 2018, the average static price-to-earnings ratio for the latest month released by the CSI was 31.86 times earnings. Combined with the current market conditions, the initial pressure level is expected to be 9-11 yuan.