2021-11-24 Pacific Securities Co., Ltd. Li Shuaihua conducted research and issued a research report "performance hit bottom, Future prospects". In this report, the opposing China Group gave a buy rating, believing that its target price was 37.20 yuan. The current share price is 20.66 yuan, which is expected to rise by 80.06%.
Lizhong Group (300428)
The third quarter performance disturbance ends, the performance is expected to return to high growth. The company's Q3 returned to its parent net profit of 61.32 million yuan, down 77.7% from the previous month, mainly due to the drag of the company's hub business: affected by the overseas epidemic situation and domestic policies, domestic and overseas aluminum prices and settlement aluminum prices are inverted with the purchase aluminum prices, metal silicon prices, sea freight and exchange rates and other profit factors have undergone higher-than-expected changes, resulting in a substantial increase in costs. However, as the policy tends to stabilize, the phenomenon of aluminum price upside down is alleviated, shipping costs gradually return to normal, and business costs will return. We believe that the worst time for the company is over, and the bottom of the performance has already appeared, as the company's wheel business returns to normal growth, automobile demand recovers, and the business of recycled aluminum alloy and master alloy enters a period of accelerated growth. in the later stage, the fluorine chemical project has added more increments, and after the performance disturbance episode of the third quarter, the company will return to the track of rapid performance growth.
After the integration of resources, the three major business sectors are the leaders of the subdivision industry. The company has increased the business of recycled cast aluminum alloy, forming a development pattern of three main industries, namely, recycled cast aluminum alloy materials, aluminum alloy wheels and functional intermediate alloy new materials, and a coordinated upgrading of the industrial chain. the company's business scale and profitability have greatly increased and entered a period of rapid development.
Recycled aluminum bibcock takes advantage of carbon neutralization and east wind to soar. The company is a recycled aluminum leader, with a cast aluminum alloy production capacity of 1.2 million tons / year, of which 461600 tons of recycled aluminum in 2020, the first in China, and continue to multi-regional, diversified layout of aluminum alloy production capacity, the leading position is further consolidated. Compared with primary aluminum, recycled aluminum can significantly reduce emissions. Each ton of recycled aluminum is equivalent to saving 3443 kg of standard coal, saving 22 cubic meters of water, and reducing solid waste emissions by 20 tons. It is estimated that the company will produce 700000 tons of recycled aluminum in 2023, which can reduce carbon dioxide emissions by nearly 10 million tons. Driven by the national strategy of 3060 double carbon target, the recycled aluminum industry has ushered in major development opportunities in the industry, and the company as a leader of recycled aluminum will fully benefit.
Aluminum alloy wheels help lighten the weight and embrace the new energy track. The company is the only company in the industry from aluminum alloy material research and manufacturing to wheel product design and manufacturing, aluminum alloy wheel production capacity of 2000 / year, the second in the industry, will continue to grow by 50% in the future. The company has actively developed the lightweight market of new energy vehicles, successfully obtained the supplier code of Tesla, Inc., and has cut into the supply chain of new energy vehicle suppliers such as Tesla, Inc., NIO Inc., XPeng Inc., Weima and so on. In 2020, new energy wheel hub sales of 437200, revenue growth of 52.32%, new energy vehicle business growth is expected.
The intermediate functional alloy industry chain extends upward and marches into new energy materials. The company continues to expand on the basis of the production capacity of 70,000 tons of functional master alloy, and the production capacity will double in the future. One of the raw materials of functional intermediate alloy materials is the by-product of lithium hexafluorophosphate production. With industrial advantages, the company marches into lithium materials, building 145000 tons of new energy lithium materials, including 18000 tons of lithium hexafluorophosphate. The profitability of the new project is strong, and the performance of the company will be significantly improved after it is put into production, and it is expected to create a new middle school.
Performance growth is expected to be strong, the company's revenue and profit is expected to rise to a new level. It is estimated that from 2021 to 2023, the return net profit of the company will reach RMB 483, 715, and 1.124 million respectively, corresponding to an EPS of 0.84, 1.24, 1.94 and 10.00 times of the previous share price, PE, 23.25, 15.71, and 10.00, respectively, maintaining the "buy" rating. The target price is 37.2 yuan, corresponding to a price-to-earnings ratio of 30 times 2022.
Risk hints: the epidemic repeatedly affects the business; the progress of the project landing is not as expected; the demand for new energy is not as expected.
In the last 90 days, a total of two agencies have given ratings and increased their holdings. According to the Securities Star valuation analysis tool, Lizhong Group (300428) has a good company rating of 3 stars, a good price rating of 3 stars and a comprehensive valuation rating of 3 stars. (rating range: 1-5 stars, up to 5 stars)