1、 See the last page for disclaimer Page 1 of 19 中中外外运运输输 Equity Research Equity Research Report Company Report 股股票票研研究究 公公司司报报告告 证证券券研研究究报报告告 有色金属行业有色金属行业 Nonferrous Metals Sector 兴发铝业兴发铝业 Xingfa Aluminium(00098 HK)Company Report:Xingfa Aluminium(00098 HK)Kevin Guo 郭勇(86755)2397 6671 公司报告：兴发铝业(00098

2、HK).hk 5 December 2022 A Leading Aluminum Product Manufacturer With Great Potential,Initiate With Buy 一家极具潜力的铝材制造龙头企业，首予“买入”评级 We initiate coverage on Xingfa Aluminium(the Company)with a TP of HK$11.73 and an investment rating of Buy.The TP corresponds to 5.0 x/3.9x/3.1x 2022-2024 PER.We expect Xing

3、fa Aluminiums sales of aluminum extrusion products for new energy vehicles to benefit greatly from the fast development of the new energy vehicle industry and it to be the main source of growth for the Company in the next 3 years.The Automobile industry is the single largest industrial user of alumi

4、num products.Demand growth for aluminum will be driven by two aspects:higher penetration rate of new energy vehicles and higher demand for aluminum products in the new energy vehicle industry.Xingfa Aluminium holds significant competitive advantages in the development and production of aluminum extr

5、usion products for new energy vehicles.Xingfa Aluminium has significant competitive advantages in the field of aluminum alloy material research,the development of aluminum extrusion products for vehicles,the design and manufacture of extrusion molds and the production of aluminum extrusion products.

6、Xingfa Aluminium has developed aluminum extrusion products for new energy vehicles and has entered into development of aluminum for vehicle enterprises.Catalysts:Fast sales growth of new energy vehicles;recovery of domestic property market.Key risks:Development of aluminum extrusion products for veh

7、icles may miss expectation;fierce competition from other aluminum extrusion producers;domestic property market may remain weak.我们首我们首次次覆盖覆盖兴发铝业兴发铝业（“公司”），（“公司”），并给予并给予 11.73 港元的目标价以及港元的目标价以及“买入买入”的投资评级。的投资评级。我们的目标价相当于 5.0 倍/3.9 倍/3.1 倍 2022 年至 2024 年市盈率。我们预计兴发铝业我们预计兴发铝业新能源汽车新能源汽车用用铝挤压材铝挤压材的销售的销售将极大受

8、益于新能源汽车产业的将极大受益于新能源汽车产业的快速快速发展发展，并成为未来三年并成为未来三年公司公司主要的增长来源。主要的增长来源。汽车产业是铝材的最重要消费者。两个因素将驱动铝材的消费增长：更高的新能源汽车渗透率和更高的新能源汽车铝材使用强度。兴发铝业在开发和生产兴发铝业在开发和生产新能源汽新能源汽车用铝挤压材方面具有显著的竞争优势。车用铝挤压材方面具有显著的竞争优势。兴发铝业在铝合金材料研究、车用铝挤压材开发、挤压模具的设计和制造、铝挤压材的生产方面具有显著竞争优势。兴发铝业已经成功开发出新能源汽车用铝挤压材并进入了与汽车企业开发车型的阶段。催化剂：催化剂：新能源汽车销量的快速增长；国内

9、房地产市场的复苏。核心风险：核心风险：车用铝挤压材的开发不及预期；来自其它铝挤压生产企业的激烈竞争；国内房地产市场持续疲软。Rating:Buy Initial 评级：买入买入(首次覆盖)6-18m TP目标价:HK$11.73 Share price 股价:HK$7.230 Stock performance 股价表现 (50.0)(40.0)(30.0)(20.0)(10.0)0.010.020.030.040.050.0Dec-21Mar-22Jun-22Aug-22Nov-22%of returnHSIXingfa Aluminum Change in Share Price 股价变动

10、 1 M 1 个月 3 M 3 个月 1 Y 1 年 Abs.%绝对变动%0.4 (23.9)(4.9)Rel.%to HS Index 相对恒指变动%(20.4)(25.4)13.0 Avg.Share price(HK$)平均股价（港元）7.2 8.1 8.5 Source:Bloomberg,Guotai Junan International.Table_Year End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 1

11、2/31(RMB m)(RMB m)(RMB)(%)(x)(RMB)(x)(RMB)(%)(%)2020A 11,887 765 1.831 26.3 3.3 8.847 0.7 0.360 6.0 22.7 2021A 15,433 888 2.119 15.7 2.8 10.693 0.5 0.800 13.7 21.7 2022F 17,863 897 2.141 1.0 3.0 12.013 0.5 0.900 13.8 18.9 2023F 18,377 1,159 2.767 29.2 2.4 13.255 0.5 1.000 15.3 21.9 2024F 20,063 1,45

12、3 3.469 25.4 1.9 15.022 0.4 1.200 18.4 24.5 Shares in issue(m)总股数(m)418.9 Major shareholder 大股东 Guangxin Aluminum Holdings 21.6%Market cap.(HK$m)市值(HK$m)2,995.1 Free float(%)自由流通比率(%)78.4%3 month average vol.3 个月平均成交股数(000)22.1 FY22 Net gearing(%)FY22 净负债/股东资金(%)5.4 52 Weeks high/low(HK$)52 周高/低(HK$

13、)11.060/6.560 FY22 Est.NAV(HK$)FY22 每股估值（港元）12.6 Source:the Company,Guotai Junan International.Company Report See the last page for disclaimer Page 2 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)TABLE OF CONTENTS 1.Core Investment Points.3 2.Profit

14、and Valuation.4 2.1 Earnings Forecasts.4 2.2 Valuation.4 3.Fast growth of the new energy vehicle industry will drive new demand for aluminum extrusion products.6 3.1 New energy vehicle industry will drive demand for aluminum products.6 3.2 Aluminum product consumption structure of new energy vehicle

15、.7 3.3 More consumption demand for aluminum extrusion and flat-rolled products.8 4.Significant competitive advantages of Xingfa Aluminium.10 4.1 Xingfa Aluminium is one of the largest aluminum products manufacturers in China.10 4.2 Xingfa Aluminium has significant profitability advantages.11 4.3 Xin

16、gfa Aluminium has a complete chain for developing new products.12 5.Company Analysis.14 5.1 Production Facility of the Company.14 5.2 Sales and Revenue.14 5.3 Gross Profit and Net Profit.15 Risk factors.17 Financial Statements and Ratios.18 3Z8VoXrX8ZqUpM9PbP6MpNoOtRsQjMoPsQlOrRoRaQmMyRxNtPsQuOpNsM

17、Company Report See the last page for disclaimer Page 3 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)1.Core Investment Points We expect Xingfa Aluminiums sales of aluminum extrusion products for new energy vehicles to benefit greatly from the fast de

18、velopment of the new energy vehicle industry and to be the main source of growth for the Company in the next 3 years.The automobile industry is the largest industrial user of aluminum products such as extrusion products,flat-rolled products and foundry products.The proportion of aluminum products in

19、 the construction of a new energy vehicle is usually much more than that of traditional vehicles as aluminum is currently the preferred light-weight metal material in the construction of new energy vehicles and manufacturers can extend driving range by reducing vehicle weight.Demand growth for alumi

20、num products will be driven by two aspects:higher penetration rate of new energy vehicles and higher demand for aluminum products in the new energy vehicle industry.We believe that Xingfa Aluminiums sales of aluminum extrusion products for new energy vehicles will benefit greatly from the fast devel

21、opment of the new energy industry and it will be the main source of growth for the Company in the next 3 years.Xingfa Aluminium holds significant competitive advantages in the development and production of aluminum extrusion products for new energy vehicles.Xingfa Aluminium has significant competiti

22、ve advantages in the field of aluminum alloy material research,the development of aluminum extrusion products for vehicles,the design and manufacture of extrusion molds and the production of aluminum extrusion products.Xingfa Aluminium develops aluminum extrusion products for new energy vehicles and

23、 develops product types in conjunction with vehicle enterprises.Sales of aluminum extrusion products of the Company will grow with the sales of new energy vehicles.Xingfa Aluminium has more than 2 decades of accumulated experience in the research and production of aluminum extrusion products and is

24、one of the largest producers of aluminum extrusion products.We expect Xingfa Aluminium to triumph over competition and to be one of the major suppliers of aluminum extrusion products to the new energy vehicle industry.We forecast Xingfa Aluminiums total sales of aluminum extrusion products to be 0.7

25、0 million tons,0.76 million tons and 0.82 million tons in 2022-2024,respectively.We forecast total sales of construction aluminum products to record a steady growth rate and will be 0.55 million tons,0.59 million tons and 0.62 million tons in 2022-2024,respectively.We forecast total sales of industr

26、ial aluminum products to be 0.15 million tons,0.17 million tons and 0.20 million tons in 2022-2024,respectively,representing a 3-year CAGR of 11.9%.Hence,we forecast Xingfa Aluminiums net profit to be RMB897.0 million,RMB1,159.4 million and RMB1,453.3 million in 2022-2024,respectively,representing a

27、 3-year CAGR of 17.9%.Catalysts 1.Fast sales growth of new energy vehicles.2.Recovery of domestic property market.Risk factors 1.Development of aluminum extrusion products for vehicles may miss expectations.Sales of industrial aluminum products will be the main growth driver of the Company in the ne

28、xt 3 years.If the development of aluminum extrusion products for new energy vehicles misses expectation,it will significantly impact net profit growth of the Company.2.Fierce competition from other aluminum extrusion producers.The Company may confront fierce competition in the sales of aluminum extr

29、usion products.Fierce competition may reduce profitability of the Company.3.Prolonged negative impact from the domestic property market.Sales of construction aluminum products contributed more than 80%of total revenue.If the domestic property market remains weak and the sales of construction aluminu

30、m products may be negatively impacted.Besides,impairment loss from trade receivables may increase if the domestic market deteriorates.Company Report See the last page for disclaimer Page 4 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)2.Profit and Va

31、luation 2.1 Earnings Forecasts We expect total net profit of Xingfa Aluminium to be RMB897.0 million,RMB1,159.4 million and RMB1,453.3 million in 2022-2024,respectively.We expect total net profit of Xingfa Aluminium to grow at a CAGR of 17.9%in 2022-2024.The fast growth in net profit will mainly be

32、attributable to more sales of aluminum products and higher average processing fees.We forecast sales of construction products to grow steadily.We forecast sales of industrial products to grow fast due to fast development of Chinas new energy vehicle market.We forecast sales of construction products

33、of Xingfa Aluminium to grow at a CAGR of 15.4%in 2022-2024 and sales of industrial products to grow at a CAGR of 17.8%in 2022-2024.Xingfa Aluminium produces high-end construction products and has great competitive advantages;sales of construction products will benefit from residential upgrades and h

34、as not been greatly impacted by fluctuation seen in the property market.Xingfa Aluminium develops industrial products for new energy vehicles and has entered into motorcycle product development with auto factories.The sales of industrial products for new energy vehicles will be the main source of gr

35、owth in the future.We expect the average processing fees of construction products to be stable in 2022-2024,but we expect the average processing fees of industrial products to improve greatly due to more sales of industrial products for new energy vehicles.Xingfa Aluminium has significant competitiv

36、e advantages in sales of high-end construction products,and we expect the Company to maintain its competitive advantages and processing fees.We expect industrial products for new energy vehicles to start to grow from 2023 and to contribute more revenue.The processing fess of industrial products for

37、new energy vehicles are much higher than that of other industrial products,so we expect the average processing fees of industrial products for new energy vehicles to improve greatly in 2022-2024.Table-1:Earnings Forecasts for Xingfa Aluminium 2020A 2021A 2022F 2023F 2024F Revenue(million RMB)Constru

38、ction Extrusion Products 9,262 12,094 14,012 14,036 14,913 Industrial Extrusion Products 2,320 2,870 3,356 3,821 4,604 Total Revenue 11,887 15,433 17,863 18,377 20,063 yoy 8.6%29.8%15.7%2.9%9.2%Gross Profit(million RMB)0 0 0 0 0 Construction Extrusion Products 1,246 1,431 1,569 1,684 1,834 Industria

39、l Extrusion Products 229 212 238 329 553 Total gross profit 1,475 1,643 1,808 2,013 2,387 yoy 11.8%11.4%10.0%11.4%18.6%Net Profit(million RMB)765 888 897 1,159 1,453 yoy 26.3%16.0%1.0%29.2%25.4%Source:the Company,Guotai Junan International.2.2 Valuation Initiate coverage of the Company with Buy rati

40、ng and TP of HK$11.73.Xingfa Aluminium is one of the leading aluminum extrusion product manufacturers in the PRC.Xingfa Aluminium insists on the strategy of construction products+industrial products dual-engine development to expand sources of revenue of the Company.We believe that Xingfa Aluminium

41、will benefit from the fast development of the new energy vehicle industry.We believe that aluminum extrusion products and flat-rolled products will benefit most from the development of the new energy vehicle industry and will record significant growth over the next 5-10 years.Xingfa Aluminium has gr

42、eat advantages in the development and supply of aluminum extrusion products for new energy vehicles and we expect Xingfa Aluminium to be a main supplier of the new energy vehicle industry in the future.We forecast sales of construction products of Xingfa Aluminium to grow at a CAGR of 15.4%in 2022-2

43、024 and sales of industrial products to grow at a CAGR of 17.8%in 2022-2024.We expect total net profit of Xingfa Aluminium to be RMB897.0 million,Company Report See the last page for disclaimer Page 5 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)RMB

44、1,159.4 million and RMB1,453.3 million in 2022-2024,respectively.Our target price for the Company is HK$11.73,which represents 5.0 x,3.9x and 3.1x 2022-2024 PER.Our investment rating for the Company is Buy.Table-2:Peers Comparison Company Stock Code Currency Last price PE(fiscal year)PB(fiscal year)

45、ROE(%)21A 22F 23F 24F 21A 22F 23F 24F 22F International Listed companies Alcoa Corp AA US USD 50.39 21.9 12.2 14.1 8.7 2.0 1.7 1.5 1.3 18.0 Norsk Hydro Asa NHY NO NOK 74.52 12.6 6.4 10.8 9.5 1.8 1.4 1.5 1.4 25.6 Arconic Corp ARNC US USD 23.73 n.a.20.5 10.4 7.6 1.6 1.5 1.2 1.0 2.7 Nippon Light Metal

46、Holdings 5703 JP JPY 1,548.00 28.5 5.7 7.6 7.0 0.5 0.5 0.5 0.4 8.5 Hindalco Industries Ltd HNDL IN INR 478.95 30.6 7.8 9.6 9.3 1.6 1.4 1.2 1.1 19.0 National Aluminium Co Ltd NACL IN INR 80.05 11.5 5.0 8.6 9.6 1.4 1.2 1.1 1.0 25.4 Simple Average 21.0 9.6 10.2 8.6 1.5 1.3 1.2 1.1 16.5 Weighted Average

47、 21.0 8.6 10.8 9.0 1.7 1.4 1.3 1.2 19.9 PRC listed companies Henan Mingtai Al Industria-A 601677 CH CNY 16.79 8.5 7.0 5.7 5.3 1.5 1.2 1.1 0.9 15.6 Shandong Nanshan Aluminum-A 600219 CH CNY 3.62 12.5 10.9 9.9 8.7 1.0 1.0 0.9 0.8 8.4 Guangdong Haomei New Mater-A 002988 CH CNY 14.57 24.4 36.9 11.6 7.5

48、1.5 1.5 1.3 1.2 4.0 Jiangsu Asia Pacific Light-A 002540 CH CNY 5.53 15.0 15.4 12.0 10.2 1.4 1.3 1.2 1.1 8.6 Simple Average 15.1 17.5 9.8 8.0 1.3 1.2 1.1 1.0 9.2 Weighted Average 12.4 11.7 9.2 8.0 1.2 1.1 1.0 0.9 9.9 HK listed companie Aluminum Corp Of China Ltd-H 2600 HK HKD 3.58 10.4 9.7 10.2 8.1 0

49、.9 0.9 0.8 0.7 9.3 China Hongqiao Group Ltd 1378 HK HKD 7.59 3.6 4.5 4.2 3.5 0.7 0.7 0.6 0.6 15.3 China Zhongwang Holdings Ltd 1333 HK HKD 1.68 2.7 2.2 1.9 n.a.0.3 0.2 0.2 n.a.9.8 Xingfa Aluminium Holdings 98 HK HKD 7.23 2.8 n.a.n.a.n.a.0.6 n.a.n.a.n.a.n.a.Simple Average 4.9 5.5 5.4 5.8 0.6 0.6 0.6

50、0.7 11.5 Weighted Average 6.9 7.1 7.2 6.0 0.8 0.8 0.7 0.7 11.9 Jiangxi Copper Co Ltd-H 358 HK HKD 11.60 5.9 6.8 9.0 6.9 0.5 0.5 0.5 0.5 7.3 Mmg Ltd 1208 HK HKD 2.15 3.5 10.4 7.4 4.5 1.2 1.1 0.9 0.7 13.2 Cmoc Group Ltd-H 3993 HK HKD 3.76 13.0 10.8 10.5 7.3 1.7 1.7 1.5 1.3 17.9 United Co Rusal Interna

51、tiona 486 HK HKD 3.98 2.4 3.2 3.2 4.2 0.7 0.6 0.5 0.5 25.3 Simple Average 6.2 7.8 7.5 5.7 1.0 1.0 0.8 0.7 15.9 Weighted Average 8.0 8.0 8.1 6.2 1.1 1.1 1.0 0.9 16.9 Source:Bloomberg.Company Report See the last page for disclaimer Page 6 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_Page

52、Header Xingfa Aluminium(00098 HK)3.Fast growth of the new energy vehicle industry will drive new demand for aluminum extrusion products We believe the fast development of the new energy vehicle industry will bring significant new demand for aluminum extrusion products.The automobile industry is a ma

53、jor user of industrial aluminum products such as extrusion products,flat-rolled products and foundry products.Lightweight materials are more common in new energy vehicles which help to improve distance that can be travelled on one battery charge,and aluminum is the most popular lightweight metal mat

54、erial.The amount of aluminum products in new energy vehicles is usually much higher than in traditional vehicles.Hence,demand growth for aluminum products will be driven by two aspects:higher penetration rate of new energy vehicles and higher demand for aluminum products in the new energy vehicle in

55、dustry.Global electric vehicle sales increased 108%yoy to 6.75 million in 2021 and represented about 8.3%of total sales of passenger vehicles.China is the largest new energy vehicle market in the world and total sales of new energy vehicles reached 6.6 million in 2021.Industry experts expect that gl

56、obal sales of new energy vehicles will exceed 10 million in 2022 and will maintain fast growth over the next 15 years.We expect that the fast development of the new energy vehicle industry will bring more demand for aluminum products.3.1 New energy vehicle industry will drive demand for aluminum pro

57、ducts Figure-1:Global Sales of Vehicle 020,000,00040,000,00060,000,00080,000,000100,000,000120,000,0002000420052006200720082009200001920202021GlobalChina Source:The International Organization of Motor Vehicle Manufacturers.Figure-2:Global Sales of Electric

58、 Vehicle 0200,000400,000600,000800,0001,000,0001,200,0001,400,0001,600,000Jan-15Jan-16Jan-17Jan-18Jan-19Jan-20Jan-21Jan-22GlobalChinaSource:EV Sales,China Association of Automobile Manufacturers.The auto industry is the largest civil industry in the world.The global auto industry is the most importa

59、nt consumer of aluminum products,much larger than that of the railway industry and airplane manufacturing industry.In 2021,total output of passenger vehicles was 57.05 million,in which 8.55 million tons of aluminum products was used if we assume that each vehicle requires 150 kg of aluminum products

60、.According to the US Aluminum Association,global consumption of aluminum products of the airplane manufacturing industry is around 0.35-0.40 million tons each year.Demand for aluminum products of the global railway industry is much less than that of the airplane manufacturing industry.China is the l

61、argest producer of railway equipment in the world and total aluminum products in the railway industry was only about 80,000 tons in 2021.New energy vehicle construction requires more aluminum products than traditional vehicles.The application of aluminum products in the manufacturing of vehicles onl

62、y started 40 years ago.Since the 1970s,more and more aluminum parts are being used in vehicles,such as vehicle body,heat exchangers,wheels,and also engine shells and gearboxes.The wide application of aluminum parts in traditional vehicles is to reduce vehicle weight and increase fuel economy.As batt

63、ery systems in new energy vehicles weigh a lot,lightweight materials are in high demand in the new energy vehicle industry.The distance that can be travelled on one charge in new energy vehicles has not reached a satisfactory level currently.Hence,we believe more aluminum products will be applied in

64、 new energy vehicles and the development of new energy vehicles will bring ore demand for aluminum products.Company Report See the last page for disclaimer Page 7 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)Table-3:Estimation of Aluminum Consumptio

65、n Per Vehicle in China 2020A 2021A 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F Passenger vehicle 138.6 148.1 157.7 167.4 177.4 187.1 197.3 207.9 219.0 230.7 242.2 Fuel 136.4 145.2 153.9 162.5 171.2 179.8 188.5 197.2 205.8 214.5 222.8 EV 157.9 173.1 188.2 201.9 215.5 226.8 238.1 249.8 261.8

66、 274.2 283.5 Hybrid 198.1 206.8 215.5 224.2 232.9 238.3 243.7 249 254.4 259.8 265.2 Commercial vehicle 122.6 133.9 145.1 156.2 165.9 180.1 194.8 209.1 223.6 238.3 253.2 Source:International Aluminum Association,CM Group.Average usage of aluminum products in new energy vehicles is expected to increas

67、e steadily.According to an estimation from the International Aluminum Association,average use of aluminum products in electric vehicles is 188.2 kg in 2022 and the average use of aluminum products in hybrid vehicles is 215.5 kg,much more than that of traditional vehicles.With the development of tech

68、nology and the auto industry,average consumption of aluminum products in new energy vehicles is expected to increase steadily.The International Aluminum Association estimates that the average usage of aluminum products in electric vehicles and hybrid vehicles will be 226.8 kg in and 238.3 kg in 2025

69、,respectively.The Chinese government also released policies to stimulate the use of aluminum products in new vehicles.According to the policy released by the central government Energy saving and new energy vehicle industry development plan 2.0,the average usage of aluminum products in new energy veh

70、icles will reach 250 kg in 2025 and 350 kg in 2030.The development of the new energy vehicle industry will bring significant new demand for aluminum extrusion products.Aluminum products used in the auto industry will benefit from two aspects:firstly,higher penetration rate of new energy vehicles in

71、auto industry and secondly,higher use intensity of aluminum products in each new energy vehicle.We expect total sales of aluminum products to the auto industry to maintain fast growth over the next 5-10 years.3.2 Aluminum product consumption structure of new energy vehicle.Figure-3:Weight Distributi

72、on of Fuel Vehicles 25.0%23.0%23.0%15.0%9.0%6.0%Engine SystemChassisVehicle BodyInterior OrnamentOuter EncirclementOthers Source:China Society of Automotive Engineers.Figure-4:Weight Distribution of New Energy Vehicles 40.0%21.0%14.0%10.0%7.0%9.0%Engine SystemChassisVehicle BodyInterior OrnamentOute

73、r EncirclementOthersSource:China Society of Automotive Engineers.The most common use of aluminum products in traditional vehicles is aluminum foundry parts and the use of aluminum extrusion and flat-rolled products.The use of aluminum products in traditional vehicles is mainly to reduce weight and i

74、mprove fuel economy.The largest part of aluminum products used in traditional fuel vehicles is aluminum foundry products.According to an article written by Li Long(2017),about 77%of aluminum products used in traditional vehicles was aluminum foundry products,and only about 20%is aluminum extrusion p

75、roducts and flat-rolled products.In traditional vehicles,aluminum foundry parts are used for producing engine shells,gearboxes,boss-of-wheels,etc.The application of aluminum products in vehicle bodies is relatively small and only several top vehicles on the market,such as the Audi A8.The Tesla Model

76、 X uses solely aluminum vehicle white-body.Company Report See the last page for disclaimer Page 8 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)Table-4:Application of Aluminum Products in Traditional Vehicles(2009)North America European Union Japan W

77、eight Ratio Weight Ratio Weight Ratio Engine 55.6 37.6%42.8 34.6%48.7 41.1%Gearbox and Driveline System 29.9 20.2%15.7 12.7%21.9 18.5%Chassis and Suspension System 8.3 5.6%11.6 9.3%3.6 3.0%Boss of Wheel 25.2 17.0%20.2 16.3%20.2 17.1%Brake System 4.1 2.8%5.1 4.1%3.5 3.0%Heat Exchanger 14.3 9.6%12.3 9

78、.9%13.6 11.5%Auto Body Panel 2.7 1.8%5.2 4.2%1.9 1.6%Vehicle Body 0.6 0.4%2.9 2.3%0.1 0.1%Heat Shield 1.9 1.3%1.5 1.2%1.1 0.9%Bumper Bar 1.1 0.7%2.7 2.2%0.6 0.5%Others 4.3 2.9%3.9 3.2%3.2 2.7%Total 148.0 100.0%123.9 100.0%118.4 100.0%Ratio of Foundry Parts 83.2%77.0%82.6%Source:Darko International.T

79、he structure of aluminum product usage in the new energy vehicle industry is much different from that of traditional vehicles.Generally speaking,the use of aluminum foundry products in new energy vehicles will be cut significantly.The engine system in new energy vehicles is replaced by electric moto

80、rs and batteries,so engine shells and gearboxes are not necessary.The engine system of traditional vehicles is the largest system that uses aluminum products.New energy vehicles do not have engine systems,so they do not need these aluminum foundry products.Instead,aluminum products are widely used i

81、n new energy vehicle bodies.As a result,more aluminum extrusion products and flat-rolled products are required in new energy vehicles.We estimate that the ratio of aluminum products used in foundry products,extrusion products and flat-rolled products in new energy vehicles is 3:3:4.Hence,the develop

82、ment of new energy vehicles will benefit producers of aluminum extrusion products and flat-rolled products greatly.Table-5:Maximum Usage of Aluminum Products in New Energy Vehicles Vehicle Parts Maximum Usage of Aluminum（kg）Ratio Roof and Trunklid 8.9 0.8%Hood 9.3 0.9%Knuckles 10.2 1.0%Bumper Beam a

83、nd Crush Boxes 10.4 1.0%BIW excl.closures 123.9 11.6%Heat exchanger 7.5 0.7%Steering 1.7 0.2%Battery Pack 42.2 3.9%Driveline 14.9 1.4%Subframe 25.5 2.4%Suspension Arm 7.5 0.7%Brake 10.2 1.0%Fenders/wings 7 0.7%Front Doors 18.9 1.8%Rear Doors 15 1.4%Wheels 26.8 2.5%IP Beam 4.8 0.4%Heat Shields 4.8 0.

84、4%Others 11.8 1.1%Total 361.3 33.7%Source:International Aluminum Association,CM Group.3.3 More consumption demand for aluminum extrusion and flat-rolled products.We expect that demand for aluminum products from the new energy vehicle industry will maintain fast growth over the next 5-10 years.Total

85、sales of new energy vehicles is expected to increase significantly over the next 5-10 years.Total sales of new energy vehicles in China is expected to exceed 7 million in 2022,and is expected to exceed 10 million in 2025.The ratio of Company Report See the last page for disclaimer Page 9 of 19 5 Dec

86、ember 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)new energy vehicles to total may be more than 35%.In the meantime,aluminum products consumed by each new energy vehicle is expected to increase steadily over the next 5-10 years.Although technological advances in li

87、thium battery technology was rapid over the past decade,it is still not satisfactory as travel distance of new energy vehicles in one charge is still much less than traditional vehicles with a full tank of fuel.Hence,cutting the weight of new energy vehicles is still a priority.We expect the applica

88、tion of aluminum products to increase steadily over the next 5-10 years,which is also in line with the governments policy orientation.We expect each new energy vehicle in 2022 to have about 150 kg-180 kg in aluminum products in its construction,and the amount to increase to 200 kg-230 kg in 2025.We

89、expect total sales of new energy vehicles to exceed 10 million in 2022.We assume that each new energy vehicle will have 200 kg in aluminum products and total demand for aluminum products will reach 2 million tons.Aluminum extrusion products and flat-rolled products will be in high demand due to the

90、development of the new energy vehicle industry.About 70%of aluminum products in new energy vehicles are aluminum extrusion products and aluminum flat-rolled products.We estimate that these products will reach about 3.5 million-4.2 million tons in 2025 and more than 7.0 million tons in 2030.Although

91、the quantity is relatively small,it is very large compared to the current quantity of extrusion products and flat-rolled products for new energy vehicles.According to Chinas Nonferrous Fabrication Association,China produced about 0.33 million tons of aluminum extrusion products for vehicles and 0.30

92、 million tons of aluminum flat-rolled products for vehicles in 2021.We believe that demand for aluminum extrusion products and flat-rolled products will be high due to the development of the new energy vehicle industry and will record significant growth over the next 5-10 years.Company Report See th

93、e last page for disclaimer Page 10 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)4.Significant competitive advantages of Xingfa Aluminium.Xingfa Aluminium is a leading company in the aluminum fabrication industry.Xingfa Aluminium is a leading produce

94、r of construction aluminum products and industrial aluminum extrusion products in China.Xingfa Aluminium produces high-end construction of aluminum products and is the single largest company in the aluminum products construction industry.Xingfa Aluminium is also a leading producer of industrial alum

95、inum extrusion products.In 2021,Xingfa Aluminium produced more than 0.2 million tons of industrial aluminum extrusion products.Xingfa Aluminium has significant competitive advantages in research,development,production and sale of aluminum extrusion products for new energy vehicles.We expect Xingfa A

96、luminium to be one of the major aluminum extrusion products providers for new energy vehicles in the next 5 years.4.1 Xingfa Aluminium is one of the largest aluminum products manufacturers in China.Figure-5:Market Structure of Chinas Aluminum Fabrication Industry 2.9%2.2%1.7%1.5%1.5%90.2%Nanshan Alu

97、minumMingtai AluminumChina ZhongwangXingfa AluminumChina HongqiaoOthers Source:China Nonferrous Metals Fabricating Industry,Guotai Junan International.Figure-6:Product Structure of Chinas Aluminum Fabrication Industry 05,00010,00015,00020,00025,00030,00035,00040,00045,00050,00020020202100

98、0 tonsFlat-rolled productsExtrusion productsAluminum foilAluminum wireOthersSource:China Nonferrous Metals Fabricating Industry.Xingfa Aluminium is one of the largest manufacturers in Chinas aluminum fabrication industry.Aluminum fabrication products mainly consist of aluminum extrusion products,alu

99、minum flat-rolled products,aluminum wire,aluminum casting products,etc.Chinas aluminum fabrication industry is a very large industry,but the leading companies are usually relatively small.China consumed 40.55 million tons of primary aluminum in 2021 and the output of aluminum fabrication products wa

100、s 44.70 million tons.However,the production scale of aluminum fabrication companies is usually small.According to a report published in Chinas non-ferrous metals academic journal,China had more than 2,000 companies producing aluminum fabrication products in 2018 and the average output of each alumin

101、um fabrication company was less than 20,000 tons.Generally speaking,production scale of Chinas top aluminum fabrication companies in each segment is less than 1 million tons each year,and the concentration rate of the 5 largest aluminum fabrication companies is less than 10%.Nanshan Aluminum is the

102、largest aluminum fabrication company in China,which produced 1.29 million tons of aluminum extrusion products and flat-rolled products in 2021.Mingtai Aluminum is the second-largest aluminum fabrication company,which produced 0.96 million tons of flat-rolled products in 2021.Xingfa Aluminium ranked

103、4th and produced 0.69 million tons of aluminum extrusion products in 2021.Xingfa Aluminium is the largest producer of construction extrusion products in China.In 2021,Xingfa Aluminium produced 0.53 million tons of construction aluminum extrusion products and 0.14 million tons of industrial aluminum

104、extrusion products.Xingfa Aluminium is the largest producer of construction aluminum extrusion products and was awarded Individual Champion Demonstration Enterprise in Manufacturing Industry by the government.Total sales of construction aluminum products of Xingfa Aluminium maintained a 5-year CAGR

105、of 14.4%,which increased from 0.29 million tons in 2016 to 0.57 million tons in 2021.Total sales of industrial aluminum products of Xingfa Aluminium maintained a 5-year CAGR of 8.1%,which increased from 0.102 million tons in 2016 to 0.151 million tons in 2021.Company Report See the last page for dis

106、claimer Page 11 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)Figure-7:Product Structure of Chinas Aluminum Fabrication Industry 2021 Source:China Nonferrous Metals Fabricating Industry,Guotai Junan International.Figure-8:Product Structure of Industr

107、ial Aluminum Extrusion Products 2021 Source:China Nonferrous Metals Fabricating Industry.4.2 Xingfa Aluminium has significant profitability advantages.Table-6:Average Processing Fees of Major Aluminum Fabrication Companies 2017 2018 2019 2020 2021 Xingfa Aluminium 5,345 5,950 5,637 6,060 5,757 China

108、 Hongqiao n.a.n.a.2,377 2,110 2,367 China Zhognwang 11,004 13,642 14,147 17,138 n.a Nanshan Aluminum 3,124 4,078 3,356 3,971 2,460 Mingtai Aluminum 3,241 3,622 3,068 3,362 3,375 Yatai Aluminum 9,765 10,574 10,821 11,651 9,470 Source:the Company,Guotai Junan International.The average processing fees

109、of Xingfa Aluminium is relatively high in the aluminum fabrication industry.The average processing fees of Xingfa Aluminium maintained at the level of RMB5,300/ton in the past 5 years.Xingfa Aluminiums processing fees are higher than most aluminum fabricating companies,and was only lower than that o

110、f China Zhongwang,which produces high-end industrial extrusion products and Yatai Technology,which produces aluminum tubes.Xingfa Aluminium was able to maintain its processing fees in an industry with fierce competition,which reflects its product advantages and cost control ability.Construction alum

111、inum extrusion products is the main product of the Company,but it is a mature market with fierce competition.Xingfa Aluminium outperformed in the industry and has maintained fast growth over the past 5 years.The Company focuses on the high-end market which reflects the research ability of the Compan

112、y,and maintains profitability which reflects its cost control ability.Table-7:Gross Margin of Major Aluminum Fabrication Companies 2017 2018 2019 2020 2021 2021 Output Xingfa Aluminium 14.0%13.6%13.2%13.7%11.7%685,006 China Hongqiao 16.7%17.1%19.6%22.5%26.6%657,000 China Zhognwang 32.6%32.7%30.1%29.

113、1%n.a.767,392 Nanshan Aluminum 22.6%17.4%21.5%23.7%24.6%1,289,800 Mingtai Aluminum 8.6%9.0%9.5%12.2%11.8%962,200 Yatai Aluminum 20.5%20.7%19.8%16.5%14.5%229,272 Source:the Company,Guotai Junan International.Company Report See the last page for disclaimer Page 12 of 19 5 December 2022 Xingfa Aluminiu

114、m 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)4.3 Xingfa Aluminium has a complete chain for developing new products.Figure-9:National Enterprise Technology Center Source:the Company.Figure-10:Physics and Chemical Testing Center Source:the Company.Xingfa Aluminium has tremendous strength

115、 in research.Xingfa Aluminiums professional and quality products stem from its R&D ability.Xingfa has one state-accredited laboratory,one post-doctoral reach station and a Photoelectric Research Development Center.The Company puts great emphasis on scientific research and development and has produce

116、d 587 patented projects.The Company also participates in formulating the national standards in China,which reflects its research ability.In addition,the company has established a key engineering technology R&D center in Guangdong Province and has achieved a series of breakthroughs in technologies in

117、 high-temperature extrusion,mold simulation analysis,and green pre-treatment with no chrome.Up to present,Xingfa Aluminium has been awarded one national Scientific Progress Prize,won 5 China nonferrous metal industry awards for science and technology,four Guangdong Scientific Technology Prizes and t

118、wo Foshan Scientific Technology Prizes.Figure-11:Extrusion Mold Processing Center Source:the Company.Figure-12:Aluminum Rod Homogeneity Furnace Source:the Company.Xingfa Aluminium has a complete chain from alloy material research,module development,product development,production and processing.After

119、 nearly 20 years of development,Xingfa Aluminium has established a complete chain for developing new aluminum extrusion products,which starts from aluminum alloy development,aluminum extrusion product design,extrusion mold design,aluminum extrusion product production and processing.Materials and sha

120、pes are key to producing aluminum extrusion products.The Company has great research strength in aluminum alloy materials and mold research capability,which enables the Company to develop aluminum alloy to meet customer standards.Xingfa Aluminium is also equipped with advanced equipment for producing

121、 aluminum extrusion products,such as high pressure extrusion machines,aluminum rod homogeneity furnaces,ingot casting equipment,heat treatment equipment,etc.With strong research strength and Company Report See the last page for disclaimer Page 13 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)

122、Table_PageHeader Xingfa Aluminium(00098 HK)advanced equipment,Xingfa Aluminium is able to develop new aluminum extrusion products which meet customer standards.4.4 Xingfa Aluminium has great competitive advantages.Figure-13:Xingfa Aluminiums Product for Vehicle Source:the Company,Guotai Junan Intern

123、al.Figure-14:Xingfa Aluminiums Product for Vehicle Source:the Company,Guotai Junan Internal.Xingfa Aluminium has great advantages in the development and supply of aluminum extrusion products for new energy vehicles.The development and supply of aluminum extrusion products for new energy vehicles is

124、not an easy business,which mainly include product development and product supply.It starts from design cooperation with automobile factories.Aluminum extrusion companies design specific parts to be installed in new vehicles.Aluminum extrusion products for new energy vehicles not only have to satisfy

125、 certain shape and strength requirements,but also electric signal penetration requirement as new energy vehicles have more intelligent software and have more sensors.If the development of new vehicles is successful and is brought to the market,aluminum extrusion companies will supply aluminum extrus

126、ion products according to demand.Xingfa Aluminium has a complete industrial chain for product development and has successfully designed several aluminum extrusion products for new energy vehicles.Currently the Company is developing aluminum extrusion products with automobile factories for new motorc

127、ycle types and is expected to enter into the supply stage in the coming years.Xingfa Aluminium has great advantages in the development and supply of aluminum extrusion products for new energy vehicles and we expect Xingfa Aluminium to be a leading supplier in the new energy vehicle industry in the f

128、uture.Company Report See the last page for disclaimer Page 14 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)5.Company Analysis Xingfa Aluminium is one of the leading aluminum extrusion product manufacturers in the PRC.Xingfa Aluminium insists on the

129、strategy of construction products+industrial products dual-engine development to expand sources of revenue for the Company.As a major supplier of construction aluminum extrusion products,Xingfa is likely to earn stable revenue from the construction materials industry.Meanwhile,the Company will lever

130、age its technology and experience and apply to the industrial materials industry and manufacture electronic consumer products and lightweight transport products.With the commencement of the precision manufacturing base situated at Sanshui Industrial Park,the Company is able to develop more industria

131、l aluminum products in the future.It will facilitate the Company to better seize market opportunities in the construction and industrial materials industry.5.1 Production Facility of the Company Figure-15:Guangdong Precision Manufacturing Base Source:the Company.Figure-16:Zhejiang New Material Compa

132、ny Source:the Company.Xingfa Aluminium has 7 production bases and has a total production capacity of about 0.7 million tons.Currently,Xingfa Aluminium has 7 production bases which are located in Guangdong Province,Zhejiang Province,Jiangxi Province and Henan Province.Most of the production bases are

133、 designed for the production of construction products,but is also able to produce industrial products.The Companys newly constructed Foshan precision manufacturing base and Xingfa New Material Company in Zhejiang will have more advanced equipment for the production of industrial products.Xingfa Alum

134、inium insists on its construction products+industrial products dual-engine development strategy and will maintain its advantages in the market of aluminum construction products and leverage its technology and experience in the development of industrial extrusion products for the high-end market.5.2

135、Sales and Revenue We forecast total sales of aluminum products of Xingfa Aluminium to grow at a CAGR of 5.2%in 2022-2024.We expect the sales of construction products to be negatively impacted by the difficulties in Chinas property market in 2022,but gradually resumed to normal growth rate in 2023-20

136、24.We expect rapid growth in sales of industrial products from 2023 due to more sales of industrial products for new energy vehicles.We forecast total sales of construction products to grow at a CAGR of 5.2%in 2022-2024 and reach 0.62 million tons in 2024.We forecast total sales of industrial produc

137、ts to grow at a CAGR of 11.9%in 2022-2024 and reach 0.20 million tons in 2024.We forecast total sales of aluminum products of the Company to grow at a CAGR of 6.7%in 2022-2024 and to be 0.70 million tons,0.76 million tons and 0.82 million tons in 2022-2024,respectively.We forecast the average proces

138、sing fees of construction products to remain stable in 2022-2024,but the average processing fees of industrial products to grow largely as the ratio of energy vehicles in the industry increases.Company Report See the last page for disclaimer Page 15 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098

139、HK)Table_PageHeader Xingfa Aluminium(00098 HK)Figure-17:Xingfas Sales of Aluminum Products 0100,000200,000300,000400,000500,000600,000700,000800,000900,0002016A 2017A 2018A 2019A 2020A 2021A 2022F 2023F 2024Ftonconstrcution profilesindustrial profiles Source:the Company,Guotai Junan International.Fi

140、gure-18:Xingfas Sales of Aluminum Products 12.3%21.0%31.3%18.2%6.1%4.8%3.5%8.5%9.3%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%0100,000200,000300,000400,000500,000600,000700,000800,000900,0002016A2017A2018A2019A2020A2021A 2022F 2023F 2024Ftontotal extrusion productsyoySource:the Company,Guotai Junan Inter

141、national.We forecast total revenue of Xingfa Aluminium to grow at a CAGR of 9.1%in 2022-2024.We expect the sales of construction products to grow steadily in 2023-2024,and the sales of industrial products to grow fast driven by fast growth of industrial products for new energy vehicle.We forecast al

142、uminum price to decline moderately in 2023-2024 as aluminum market fundamentals return to normal.As a result,we forecast revenue from construction products to grow at a CAGR of 7.2%in 2022-2024.We forecast revenue from industrial products to grow at a CAGR of 17.1%in 2022-2024.We forecast total reve

143、nue of the Company to grow at a CAGR of 9.1%in 2022-2024 and to be RMB17,862.9 million,RMB18,376.7 million and RMB20,063.2 million in 2022-2024,respectively.Figure-19:ASP of Xingfas Aluminum Products 05,00010,00015,00020,00025,00030,0002016A 2017A 2018A 2019A 2020A 2021A 2022F 2023F 2024FRMB/toncons

144、trcution profilesindustrial profilesaluminum price Source:the Company,Guotai Junan International.Figure-20:Total Revenue of Xingfa Aluminium 12.1%29.7%32.5%16.0%8.6%29.8%15.7%3.6%9.6%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%05,00010,00015,00020,00025,0002016A 2017A 2018A 2019A 2020A 2021A 2022F 2023F 2

145、024Fmillion RMBTotal revenueyoySource:the Company,Guotai Junan International.5.3 Gross Profit and Net Profit We forecast total gross profit of Xingfa Aluminium to grow at a CAGR of 13.0%in 2022-2024.We expect the average processing fees of construction products to remain stable in 2023-2024,and the

146、average processing fees of industrial products to grow fast due to more sales of industrial products for new energy vehicles.As a result,we forecast gross profit from construction products to grow at a CAGR of 8.6%in 2022-2024.We forecast gross profit from industrial products to grow at a CAGR of 37

147、.7%in 2022-2024.We forecast total gross profit of the Company to grow at a CAGR of 13.0%in 2022-2024 and to be RMB1,985.8 million,RMB2,220.8 and RMB 2,616.1 million in 2022-2024,respectively.Company Report See the last page for disclaimer Page 16 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)

148、Table_PageHeader Xingfa Aluminium(00098 HK)Figure-21:Gross Profit of Xingfa Aluminium 05001,0001,5002,0002,5003,0002016A 2017A 2018A 2019A 2020A 2021A 2022F 2023F 2024Fmillion RMBconstrcution profilesindustrial profilesOthers Source:the Company,Guotai Junan International.Figure-22:Gross Margin of Xi

149、ngfa Aluminium 0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%2016A 2017A 2018A 2019A 2020A 2021A 2022F 2023F 2024Fconstrcution profilesindustrial profilestotal gross marginSource:the Company,Guotai Junan International.We forecast total net profit of Xingfa Aluminium to grow at a CAGR of 17.9%in 2022-2024

150、and to be RMB897.0 million,RMB1,159.4 million and RMB1,453.3 million in 2022-2024,respectively.We expect total net profit of Xingfa Aluminium to grow at a CAGR of 17.9%in 2022-2024.Fast growth in net profit was mainly attributable to more sales of aluminum products and higher average processing fees

151、.Figure-23:Net Profit of Xingfa Aluminium 0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%0.0200.0400.0600.0800.01,000.01,200.01,400.01,600.02016A 2017A 2018A 2019A 2020A 2021A 2022F 2023F 2024Fmillion RMBtotal net profityoy Source:the Company,Guotai Junan International.Figure-24:Average Processing Fees 01,00

152、02,0003,0004,0005,0006,0007,0002017A2018A2019A2020A2021A2022F2023F2024FRMB/tonconstrcution profilesindustrial profilesSource:the Company,Guotai Junan International.Company Report See the last page for disclaimer Page 17 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Alu

153、minium(00098 HK)Risk factors 1.Development of aluminum extrusion products for vehicles may miss expectations.Sales of industrial aluminum products will be the main growth source of the Company in the next 3 years;if the development of aluminum extrusion products for new energy vehicles misses expect

154、ation,it will significantly impact net profit growth of the Company.2.Fierce competition from other aluminum extrusion producers.The Company faces fierce competition in sales of aluminum extrusion products;fierce competition may reduce profitability of the Company.3.Ongoing negative impact from the

155、domestic property market.Sales of construction aluminum products contributed more than 80%of total revenue.If the domestic property market remains weak,sales of construction aluminum products may be negatively impacted.Besides,impairment loss from trade receivables may increase if the domestic marke

156、t deteriorates.Company Report See the last page for disclaimer Page 18 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)Financial Statements and Ratios Table_IncomeStatement Income Statement Year end 31 Dec(RMB m)2020A 2021A 2022F 2023F 2024F Total Reve

157、nue 11,887 15,433 17,863 18,377 20,063 COGS(10,257)(13,621)(15,877)(16,156)(17,447)Gross profit 1,629 1,812 1,986 2,221 2,616 Other income 146 133 157 144 149 Distribution costs(360)(315)(357)(349)(381)Administrative Expenses(396)(401)(464)(459)(502)Impairment loss(53)(79)(167)(100)(86)Operating Pro

158、fit 967 1,150 1,154 1,456 1,796 Other gains and losses 8 7 3 4 2 Finance costs(102)(101)(97)(89)(80)Profit Before Tax 873 1,055 1,061 1,371 1,718 Income Tax(112)(168)(159)(206)(258)profit After Tax 761 887 902 1,165 1,461 Non-controlling Interest 4 1(5)(6)(7)Shareholders Profit/Loss 765 888 897 1,15

159、9 1,453 Basic EPS 1.831 2.119 2.141 2.767 3.469 Cash Flow Statement Year end 31 Dec(RMB m)2020A 2021A 2022F 2023F 2024F Profit before tax 873 1,055 1,061 1,371 1,718 Adjust for depre.&amort.463 464 547 531 571 Change in WC(244)(79)(339)(64)(83)Income tax paid(136)(132)(135)(175)(219)Others 16 24 3 3

160、(9)Cash from Operating Activities 973 1,333 1,136 1,666 1,978 Capital expenditure(439)(687)(720)(792)(919)Interest income received 54 78 31 29 30 Others 175 4(215)(12)(137)Cash from Investing Activities(210)(605)(904)(775)(1,026)Share issue 0 6 0 0 0 Interest paid(106)(95)(87)(80)(72)Dividend paid(1

161、07)(124)(377)(419)(503)Net cash from borrowing(569)621(66)9(38)Others 0 0 86(321)(179)Cash from Financing Activities(781)409(445)(811)(792)Net Changes in Cash(18)1,137(213)80 161 Cash at Beg of Year 528 510 1,643 1,429 1,507 Foreign exchange rate changes(0)(4)(1)(2)(2)Cash at End of Year 510 1,643 1

162、,429 1,507 1,665 Table_BalanceSheet Balance Sheet Year end 31 Dec(RMB m)2020A 2021A 2022F 2023F 2024F Investment property 73 169 180 190 202 PPE 2,271 2,534 2,874 3,235 3,668 Right-of-use assets 336 330 337 344 351 Intangible assets 4 3 0 0 0 Deferred tax assets 53 68 73 77 82 others 6 20 23 25 26 T

163、otal non-current assets 2,744 3,126 3,487 3,871 4,329 Inventory and other contract assets 1,253 1,482 1,697 1,709 1,846 Trade and other payables 3,546 4,668 5,180 5,237 5,537 Prepayments 199 199 203 207 212 Pledged deposits 171 209 219 230 242 Cash&cash equivalents 510 1,643 1,429 1,507 1,665 Others

164、 14 15 0 0 0 Total Current Assets 5,692 8,216 8,729 8,891 9,502 Total Assets 8,436 11,342 12,216 12,762 13,831 Trade and other payables 3,322 4,725 5,109 5,109 5,457 Contract liabilities 198 228 237 247 257 Loans and borrowings 811 493 345 407 652 Others 56 97 94 98 103 Total Current Liabilities 4,3

165、87 5,543 5,785 5,861 6,469 Loans and borrowings 319 1,259 1,340 1,286 1,003 Deferred income 15 26 27 29 30 Deferred tax liabilities 11 30 31 33 35 Others 7 5 0 0 0 Total Non-current Liabilities 351 1,320 1,398 1,348 1,068 Total Liabilities 4,738 6,863 7,183 7,209 7,538 Total Shareholders Equity 3,69

166、7 4,479 5,032 5,552 6,292 Minority Interest 1 0 1 1 1 Total Equity 3,698 4,479 5,033 5,553 6,293 Financial Ratios 2020A 2021A 2022F 2023F 2024F Margin:Gross margin 13.7%11.7%11.1%12.1%13.0%Net margin 6.4%5.8%5.0%6.3%7.2%ROE 22.7%21.7%18.9%21.9%24.5%ROA 9.4%9.0%7.7%9.3%11.0%Free CF 534 646 416 874 1,

167、060 Net gearing 18.4%2.6%5.4%3.5%-0.2%Company Report See the last page for disclaimer Page 19 of 19 5 December 2022 Xingfa Aluminium 兴发铝业(00098 HK)Table_PageHeader Xingfa Aluminium(00098 HK)Table_IndustryRatingDefinition Sector Rating Definition The Benchmark:Hong Kong Hang Seng Index Time Horizon:6

168、 to 18 months Rating Definition Outperform 跑赢大市 Relative Performance5%;or the fundamental outlook of the sector is favorable.Neutral 中性 Relative Performance is-5%to 5%;or the fundamental outlook of the sector is neutral.Underperform 跑输大市 Relative Performance15%;or the fundamental outlook of the comp

169、any or sector is favorable.Accumulate 收集 Relative Performance is 5%to 15%;or the fundamental outlook of the company or sector is favorable.Neutral 中性 Relative Performance is-5%to 5%;or the fundamental outlook of the company or sector is neutral.Reduce 减持 Relative Performance is-5%to-15%;or the fundamental outlook of the company or sector is unfavorable.Sell 卖出 Relative Performance-15%;or the fundamental outlook of the company or sector is unfavorable.