Event

On January 28, the company announced: (1) the company issued a fixed increase plan (revised version), which intends to issue no more than 60 million shares. raise no more than 2.284 billion yuan for high-end auto parts intelligent manufacturing project (phase II), auto parts intelligent manufacturing European production base project and so on. (2) Quanfeng Investment, the controlling shareholder of the company, and its co-actor Quanfeng Investment voluntarily extend the lock-up period for 12 months from the date of expiration of the restriction on all shares held by the company before the initial public offering. (3) Xianghe Yong'an, a shareholder of the company, has reduced its holdings by a total of 4.9625 million shares through centralized bidding and block trading, accounting for 2.46% of the company's total share capital.

Brief comment

The participation of the controlling shareholders in the subscription shows their determination to extend the lock period and firmly value the development of the company. (1) the company issues a fixed increase plan (revised version), which intends to issue no more than 60 million shares to specific investors, including Quanfeng Investment, and raise no more than 2.284 billion yuan. Among them, the subscription amount of Quanfeng investment does not exceed 500 million yuan, and the final number of subscription shares does not exceed 10% of the total share capital after the issue. It is proposed to use 8.36,3.79 and 389 million yuan to raise funds for the construction of factories in Maanshan, Europe and Nanjing respectively, with a construction period of about two years. It is estimated that the total annual income / annual profit will be 18.35 and 277 million yuan after reaching production. (2) Quanfeng Investment, the controlling shareholder of the company, and its co-actor Quanfeng Investment voluntarily extended the lock-up period for 12 months from the date of expiration of the restriction to May 21, 2023 for all shares held by it before the initial public offering of the company. The controlling shareholders participate in the increase and extend the lock-up period of the shares held before the public offering for 12 months, demonstrating their firm confidence in the future development of Quanfeng Automobile. We believe that with the gradual progress of fund-raising projects, the company is expected to seize the rapid growth opportunities of the aluminum die-casting industry, and high growth can be expected in the future.

New orders and new customers continue to break through, and the new production capacity helps to cash in the performance. In 2021, with the high growth of the new energy industry, the aluminum die-casting industry showed a strong boom, the company's new energy business and technology accumulation continued to be recognized by customers, and new orders continued to break through. In February, we got the fixed point of 375 million yuan project for motor shell and electric control shell of Mobil New Energy vehicle. In March, we got the fixed point of 400 million yuan for the valve plate of BYD DMI gearbox. In August, we got the fixed point of 1.2 billion yuan for the transmission shell of Great Wall Lemon DHT platform project. In November, we got the fixed point of 550 million yuan for Valeo motor shell. In December, we got the fixed point of 1.7 billion yuan for Chongqing Castle Peak transmission box. The saturation of on-hand orders requires the company to release new capacity quickly. At present, the capacity utilization rate of the company's Nanjing factory is as high as 95%. Due to capacity bottlenecks and delivery pressure, the company has repeatedly advanced the progress of factory construction. at present, the Maanshan plant has been completed ahead of schedule, and Q1 capacity has been gradually climbing to contribute to the increase this year. The Hungarian plant will start production in the second half of this year, while the Nanjing plant will further build new capacity.

Adhere to R & D investment and cast technical barriers. The company has been prospectively laying out the new energy business since 2013, and has core technology and profound accumulation in the field of three power plants. In 2020, the company keenly captured the trend of large-scale and integrated transformation and upgrading of the industry. at present, it has achieved a stable supply of 5000t integrated die casting orders, and 6000t and 8000t die casting machines will be gradually put in place in the second half of the year. Lightweight aluminum die-casting track ushered in a golden era of rising volume and price, the company is expected to rely on core technical advantages to consolidate the moat and fully seize the opportunities for the development of the industry.

Investment suggestion

Aluminum die-casting industry has become a high-growth track of "volume and price rising" under the rapid development of the new energy industry. This increase will help the company to alleviate the capacity bottleneck and gradually realize the growth. We are firmly optimistic about the company's medium-and long-term growth and business development ability. it is estimated that the company's net profit from 2022 to 2023 will be 2.82 yuan and 448 million yuan respectively, and the corresponding share price PE will be 24X and 15X respectively. Give a "buy" rating risk hint

1, the risk of the sales of new energy vehicles falling short of expectations; 2, the risk of the impact of COVID-19 's epidemic situation exceeding expectations; 3, the risk of chip supply shortage aggravating the risk; 4, the risk of rising prices of aluminum alloy and other raw materials; 5. The risk of factory construction in Anhui and Europe falling short of expectations.