Huafon Aluminium(601702) 东吴证券·2024-04-26 09:00Investment Rating - Buy (Maintained) [3][17] Core Views - Strong downstream demand drives continuous sales growth: The company, as a leader in aluminum heat transfer materials, benefits from robust demand in the new energy vehicle sector, leading to increased market share and sales. In 2023, the company's aluminum plate and foil production/sales reached 388/383 thousand tons, up 15%/16% YoY, compared to a 1.2% YoY decline in China's overall aluminum plate and foil production [3] - Smooth raw material price transmission: In 2023, the company's aluminum plate and foil price was 24,000 yuan/ton, down 7% YoY, mainly due to the decline in upstream aluminum ingot prices. The company's pricing model is "raw material + processing fee," with a cost of 20,000 yuan/ton in 2023, down 9% YoY, of which over 80% is aluminum ingot, indicating smooth raw material price transmission [5] - Product structure upgrade drives steady profit growth: In 2023, the company's product gross profit per ton was 3,762 yuan/ton, up 7% YoY, and net profit per ton was 2,350 yuan/ton, up 16% YoY. Despite intense competition in some industry products leading to processing fee declines, the company's product premium capability is evident, with a full-year gross margin of 15.9%, up 2 ppts YoY [16] - Deep binding with high-quality customers and active development of emerging markets: The company focuses on high-end customers, supplying world-renowned automotive suppliers like Mercedes-Benz, BMW, and Tesla, as well as mainstream new energy heat exchange manufacturers like Sanhua and Yinlun. In emerging markets, the company is actively expanding into energy storage, data centers, and wind power, with a current capacity of over 380,000 tons and plans for a second-phase project of 150,000 tons of aluminum plate and foil for new energy vehicles [5] Financial Performance - 2023 revenue was 9.29 billion yuan, up 9% YoY, with net profit attributable to the parent company of 899 million yuan, up 35% YoY, in line with expectations. In Q1 2024, revenue was 2.4 billion yuan, up 18% YoY, with net profit attributable to the parent company of 250 million yuan, up 50% YoY, setting a historical high [24] - In Q1 2024, the company's revenue was 2.4 billion yuan, with a gross margin of 16%, up 1.3 ppts QoQ. Due to a reduction in financial expenses of 23.12 million yuan and a decrease in asset impairment of 20.96 million yuan, net profit attributable to the parent company rose to 250 million yuan, with a net profit margin of 10.7%, up 2.2 ppts YoY and 1.7 ppts QoQ [6] - The company's expense ratio in 2023 was reasonable, with sales/management/R&D expense ratios of 0.8%/1.3%/2.5%, up 0.3/0.2 ppts and down 0.5 ppts YoY, respectively. The net profit margin attributable to the parent company was 9.7%, up 1.9 ppts YoY [27] Profit Forecast and Valuation - Revenue is expected to grow from 9.29 billion yuan in 2023 to 17.45 billion yuan in 2026, with a CAGR of 22.79% [1][11] - Net profit attributable to the parent company is expected to grow from 899 million yuan in 2023 to 1.77 billion yuan in 2026, with a CAGR of 25.66% [1][11] - EPS is expected to grow from 0.90 yuan/share in 2023 to 1.77 yuan/share in 2026, with a P/E ratio of 21.31x in 2023, decreasing to 10.84x in 2026 [1][11][20] Key Financial Indicators - ROIC increased from 15.28% in 2023 to 19.41% in 2026 [20] - ROE (diluted) increased from 19.87% in 2023 to 19.52% in 2026 [20] - Asset-liability ratio decreased from 37.01% in 2023 to 19.04% in 2026 [20]