Xinjiang Zhonghe (600888): Revenue improves, electronic aluminum foil business continues to improve

Event: Recently, Xinjiang Zhonghe released its 2019 Interim Report, and the company achieved operating income in the first half of 201922.

5.3 billion, down 1 year.

89%; realized net profit attributable to shareholders of the parent company of 9076.

640,000 yuan, down 11 every year.


Basic income is 0.

1089 yuan, down 11 before.


  Opinion: Revenue has improved, and the fire accident has significantly affected the revenue of the sector.

In the first half of 2019, the company realized operating income22.

5.3 billion, down 1 year.


The priority is to reduce the revenue of electrode foil products by 21.

47%; alloy product revenue fell 28.


Among other products, aluminum products perform better, and revenue grows more each year.

32%; Revenue from high-purity aluminum and electronic aluminum foil products was basically flat compared to the same period last year.

The decline in electrode foil product revenue was mainly due to the fire accident in the corroded foil workshop and the decline in production and sales.

In the first half of the year, the company realized a net profit of 9067 attributable to shareholders of the parent company.

640,000 yuan, down 11 every year.


The main reason is that rising costs have caused the product’s gross profit margin to decrease.

Among them, the gross profit margin of electrode foil products decreased by 1.

36 units, the gross profit margin of alloy products fell by 3.

48 units.

  The increase in costs is due to the increase in the cost of bulk raw materials alumina compared to the same period of the previous period, and the increase in costs caused by the company’s external procurement of corrosion foil production products.

  The electronic aluminum foil business continued to improve. The corrosion of foils and the formation of foil projects progressed smoothly.

The company is one of the first military aluminum electronic new material development companies, has the world’s largest high-purity aluminum production base, and has now formed the “energy-high-purity aluminum-electronic aluminum foil-electrode foil” electronic new material circular economy industrial chain.

The report summarizes that the prices of the company’s main products, electronic aluminum foil and electrode foil, have increased significantly.

In this context, the gross 杭州桑拿 profit margin of electronic aluminum foil products reached 30.

43%, an increase of 2.

One single, an increase of 4.

03 averages.

In the first half of 2019, the company vigorously promoted the construction of major projects such as 15 million square meters of high-pressure high-grade corrosion foil projects and 15 million square meters of high-pressure high-efficiency foil formation projects.

  After full production, the company’s production capacity will be increased, and revenue can be significantly increased.

  The private placement was completed, and asset quality was significantly improved.
The report summarized that the company completed the private placement, the asset-liability ratio decreased significantly, the debt repayment ability improved significantly, and the asset structure was healthier.

According to 杭州桑拿网 the company’s “Report on Non-public Issuance of Shares”, after the registration of new shares, Gree Electric Co., Ltd., the company’s third largest shareholder, holds the company’s shares.

Gree’s strategic shareholding promotes the company to strengthen cooperation with downstream enterprises, which is conducive to the company’s products to achieve more stable sales.

  Earnings forecast and rating: We expect the company’s diluted expected earnings for 2019-2021 to be 0.

13 yuan, 0.

16 yuan, 0.

20 yuan.

According to the latest closing price, the corresponding PE is 36, 29, and 24 times, respectively, maintaining the “buy” level.

  Risk factors: The price of electronic aluminum foil is gradually changing; the sales of high-purity aluminum is lower than expected; the transformation of the logistics industry is gradually expected.