Core investment logic: (1) new energy boost capacitor demand reversal, fund-raising projects help electrode foil prices rise; (2) high purity aluminum business fund-raising projects thickening revenue, the company as the only supplier of ultra-high purity 5N5 aluminum billet, is expected to benefit from import replacement of aluminum targets; (3) raised high strength and high toughness aluminum forging project will benefit from aerospace demand volume, the high gross profit of the project brings high performance elasticity for the company.

Core assumptions: (1) the company's 2019 fundraising electrode foil project is expected to increase volume in 2021 and reach production in 2022, and benefit from downstream new energy and other demand-driven volume and prices; (2) the company's 2021 fundraising project is expected to reach production in the first half and second half of 2022 respectively, bringing performance increments for the company. (3) the gross profit margin of each business of the company remains stable, and the expenses will continue to improve during the company period.

We expect the company's revenue from 2021 to 2023 to be 7.203 billion yuan, 8.857 billion yuan and 9.351 billion yuan respectively, an increase of 26%, 23% and 5.6% respectively over the same period last year. The net profit of homing was 741 million yuan, 1.019 billion yuan and 1.188 billion yuan respectively, up 111.2%, 37.4% and 16.0% respectively over the same period last year, and the EPS was 0.56,0.77 and 0.89 yuan respectively. The PE corresponding to the closing price on July 30, 2021 was 16.7X, 12.2X and 10.5X, maintaining the "prudent overweight" rating.

Risk hint

The risk of a sharp fall in aluminum prices

The progress of the company's fund-raising project is not as expected.

The growth of demand downstream of electrode foil is less than expected.

Global macroeconomic and political risks.