The 2016 annual results of the Company were generally in line withmarket consensus and our estimations. Total revenue of the Companyincreased by 3.2% yoy to RMB 16,695 million, net profit attributable toshareholders increased by 2.4% yoy to RMB 2.87 billion.
The Company expects the output of aluminum extrusion products togrow steadily in 2017, and aluminum flat-rolled production lines tocontribute about 150,000 tons in output of aluminum plates. TheCompany continues to install more advanced and high-pressure extrusionmachines to replace old and low-pressure extrusion machines; 99 newextrusion machines are expected to be installed in the coming 3 years.
We expect processing fees of aluminum extrusion production tocontinue to improve in 2017. The Company is intentionally assigning moreproduction lines to produce higher margin aluminum extrusion products. TheCompany has constructed primary aluminum production lines which arehelpful in reducing procurement costs of primary aluminum.
Maintain TP at HK$ 5.50 and maintain “Buy”.