GTJA initiated coverage on Xingfa Aluminium (98.HK), setting a Target Price of HK$11.73 and an investment rating of ‘Buy’

EQS Newswire / 08/12/2022 / 14:23 UTC+8

GTJA issued a report on 5 December on Xingfa Aluminium (98.HK), indicating that Xingfa’s sales of aluminum extrusion products for new energy vehicles will benefit greatly from the fast development of the new energy vehicle industry, which will also be the one of the main sources of growth for the Company in the next 3 years.


The report noted that the automobile industry is the single largest industrial user of aluminum products. GTJA further cited an estimation from the International Aluminum Association that the average use of aluminum in electric vehicles and hybrid vehicles is much more than that of traditional vehicles. In addition, according to the policy released by the China central government “Energy saving and new energy vehicle industry development plan 2.0”, the average usage of aluminum products in new energy vehicles will reach 250 kg in 2025 and 350 kg in 2030.


The report pointed out that Xingfa is one of the leading aluminum extrusion product manufacturers in China, which 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, enabling Xingfa to develop aluminum alloy for new energy vehicles to meet customer standards.


As number of new energy vehicle are expected to maintain fast growth over the next 15 years, GTJA expected Xingfa to triumph over competition and to be one of the major suppliers of aluminum extrusion products to the new energy vehicle industry. With further consideration of the advantages of its traditional strengths – relatively high aluminium processing fees and significant presence in aluminum fabrication in China, GTJA forecasted Xingfa’s net profit to be RMB897.0 million, RMB1,159.4 million and RMB1,453.3 million in 2022-2024, respectively, representing a 3-year CAGR of 17.9%, mainly attributable to more sales of aluminum products and higher average processing fees from certain products.


GTJA therefore initiated coverage on Xingfa Aluminium with a TP of HK$11.73 and an investment rating of “Buy”. The TP corresponded to 5.0x/3.9x/ 3.1x 2022-2024 PER.



08/12/2022 Dissemination of a Financial Press Release, transmitted by EQS News.
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