Investment highlights: Shenzhen Xinxing: The world's largest manufacturer of aluminum grain refining agents. The company is mainly engaged in R&D, production and sales of aluminum grain refining agents. It is the only professional manufacturer of aluminum grain refining agents with a complete industrial chain in the industry. Its business covers fluorite mining, fluoride salt manufacturing, and aluminum grain refining agent production. The company is the world's largest manufacturer of aluminum grain refining agents. The product technical indicators are already at the leading international level. At the same time, it is also the only company in the industry that independently develops and manufactures electromagnetic induction furnaces and continuous rolling mills for key production equipment. Its self-developed electromagnetic induction furnaces and continuous rolling mills have obtained many domestic and foreign invention patents. An important additive in the aluminum processing industry, market demand is growing rapidly. The aluminum grain refiner greatly improves the strength, toughness and plasticity of aluminum after processing, reduces the occurrence of defects such as cracks, and obtains high-performance aluminum. Domestic aluminum production reached 455.46 million tons in 2018, an increase of 103.56% over 2010. Consumption of aluminum grain refining agents also increased from 46,600 tons in 2010 to 105,900 tons in 2018, an increase of 127.25%. As the performance requirements for aluminum products in downstream applications continue to improve, it is estimated that by 2020, China's consumption of aluminum grain refining agents will reach 138,000 tons, an increase of 30.4% over 2018. Demand for high-end aluminum is expanding, and industry concentration is increasing. In 2017, there were about 50-60 grain refiner manufacturers in China, but there were few large-scale enterprises, low industry concentration, and simple product processes. Shenzhen Xinxing basically represents the current leading level of technology in the industry. As the performance requirements for aluminum products in downstream applications continue to increase, and the scale of use of aluminum products in military, aerospace, rail transit and other industries continues to expand, high-end aluminum will become the main growth market in the future, and the proportion of high-performance grain refiners used will also increase, and leading industry companies with technical and scale advantages will usher in good opportunities for industry integration. The layout of the whole industry chain creates an integrated core advantage. The company has been engaged in the aluminum grain refiner business for more than 20 years. Since its establishment, it has continued to expand the aluminum processing industry chain, gradually acquiring an upstream fluorite mine (2010, Mianjiang Fluorite), investing in the construction of a fluoride salt production base (2011, Songyan Metallurgy), and participating in hydrofluoric acid companies (2018, 30% of Huikai Chemical) to build an integrated industrial chain of “fluorite mining, fluorine salt manufacturing, and aluminum grain refiner production”. Independently developed KalF4 energy-saving materials, and the market prospects are broad. At the end of 2014, the company discovered that a low molecular ratio of potassium tetrafluoroaluminate can replace aluminum fluoride, a flux additive added during aluminum electrolysis production, reducing the working temperature of aluminum during aluminum electrolysis, increasing current efficiency by at least 2%, saving 500 degrees of electricity per ton of aluminum, and the sales price is close to aluminum fluoride. According to the calculation of China's annual production of electrolytic aluminum of 35.8 million tons in 2018, the market space for this product is about 286,000 tons, and the market prospects are very broad. Profit forecasting and investment ratings. We expect the company's net profit for 2019-2021 to be 190 million yuan, 250 million yuan, and 322 million yuan. The corresponding EPS can reach 1.19 yuan, 1.56 yuan, and 2.01 yuan, respectively. The corresponding PE is 30-35 times that of 2019, and the corresponding reasonable value range is 35.70-41.65 yuan. The first coverage will give it an superior market rating. Risk warning: Project commissioning is not as good as expected; risk of aluminum ingot price fluctuations.