Aluminum template faucet, stable core competitiveness. The company was founded in 2011 and has been deeply involved in the field of aluminum mold system products for many years. It has now grown into a leading enterprise in the aluminum formwork industry, actively broadening product categories with aluminum mold systems as the core, and implementing the “1+N” strategy to achieve collaborative development. The company seizes industry opportunities to rapidly expand its business scale. In 2014-2022, the compound growth rate of the company's revenue reached 55.2%, and the compound growth rate of net profit to mother reached 43.3%.
There is considerable room for development, and the penetration rate is expected to accelerate. The aluminum mold system has advantages in construction quality, construction efficiency, safety, energy saving and environmental protection, and economic benefits. Currently, the penetration rate of aluminum formwork in developed countries can reach more than 90%, while the domestic penetration rate is still about 35%. The increase in penetration rate is expected to drive the continuous expansion of industry demand.
At the same time, policies help the aluminum formwork industry continue to develop and continue to increase the penetration rate of aluminum formwork through green building construction; as a segment in the infrastructure leasing and contracting industry, enterprises need to improve their digital capabilities, reduce costs and increase efficiency, and the leasing business also tests the refined service capabilities of enterprises. Digital development can improve enterprise operation capabilities, achieve market control and exquisite service, thus helping enterprises increase their customer stickiness. We estimate that if the penetration rate of aluminum formwork reaches 45% in 25, the amount of aluminum formwork holdings is expected to reach 102.144 million square meters, the market size is expected to reach 49.3 billion yuan, and the CAGR is 6.52% in 21-25.
Multiple core competencies ensure sustainable business development: 1) Actively invest in production capacity construction to lay the foundation for large-scale expansion: The company issued convertible bonds in April 2023, raised about 614 million yuan in capital to expand the existing business at the Jiangmen and Chongqing construction bases. Capacity expansion is expected to drive the company's new round of endogenous growth, leading to increased production and sales, and scale effects are expected to gradually appear; 2) Diversified product layout, and the synergy effect continues to show:
The company's products can be used in traditional cast-in-place buildings and prefabricated construction models, and protective platforms and prefabricated prefabricated parts can all be used in combination with the core business aluminum template to achieve synergy. Currently, the company is developing a rich product reserve, aiming to form a comprehensive category layout to maintain its competitive advantage; 3) Early development of overseas markets, the Southeast Asian market growth relay: the company laid out overseas markets early, overseas business gradually grew, and the Southeast Asian market space was broad. The company's early expansion of scale and formed domestic and external two-wheel drives. 4) Comprehensive services enhance reputation and “integration of the two” improve efficiency: The company has outstanding comprehensive service advantages, perfect service system and team organization, and focuses on improvement in the two directions of informatization and industrialization. Per capita income/profit generation is on the rise, and the number of template turnover layers is at a high level, reflecting the company's efficient operation and management capabilities.
Investment advice: As a leader in the aluminum formwork industry, the company is expected to benefit from stabilizing demand in real estate and infrastructure construction, and its performance is elastic in the short term. In the medium to long term, it is expected to benefit from demand expansion due to increased penetration rate of aluminum formwork, and an increase in market share under supply side clearance. We expect the company's net profit to be 0.25, 1.71, and 280 million yuan respectively in 23-25 years. The corresponding EPS is 0.10, 0.69, and 1.13 yuan, respectively.
Risk warning: Raw material prices have risen above expectations, real estate policy implementation falls short of expectations; fund-raising project construction falls short of expectations; accounts receivable recovery falls short of expectations.