China Zhongwang is a leading aluminum processed product developerand manufacturer in Asia. The Company is the second largest industrialextrusion product developer and manufacturer in the world and the largest inAsia.
We believe the consumption demand of high-end aluminum extrusionproducts and aluminum plate/sheet holds great potential in the future,driven by the fast growth of railways, subways, substitution demand ofcommercial vehicles and other high-tech sectors in China.
The output of aluminum extrusion products of the Company is expectedto increase by 2.8%, 2.9% and 9.7%, respectively, from 2015 to 2017. TheCompany plans to produce 150,000 and 400,000 tons of aluminum flatrolled products in 2016-2017, respectively.
Total revenue of the Company is expected to increase by 1.5%, 21.4%and 34.7%, respectively, from 2015 to 2017. The EPS is expected toincrease by 4.2%, 15.2% and 36.0%, respectively, to RMB 0.372, 0.429and 0.583 from 2015 to 2017.
Initiate coverage with “Buy” rating and TP of HKD 4.68. The Company isexpected to continue to lead in the production of high-end aluminum products,but will confront more fierce competition from domestic manufacturers.