[Chinalco.com] raised its target price by 52.0 yuan and raised its rating to "overweight." As the company's ceramic ink gross margin was lower than expected, we revise down EPS for 2014 to RMB 0.65 (originally RMB 0.79). As the company's newly added high-purity alumina business will usher in an outbreak in 2015, we increase the EPS for 2015 and 2016 to 1.30. Yuan, 1.76 yuan (the original 1.15 yuan, 1.63 yuan) yuan. We believe that the company's two most important reserve products, high-purity alumina and nano-zirconia, are expected to contribute significantly in 2015, giving the company 40 times PE valuation in 2015, which is equivalent to the industry average, and raises the target price to 52.0 yuan. , raised to "Overweight" rating.
Domestic high-purity alumina companies usher in rapid growth. Due to explosive growth in downstream lithium batteries and sapphire, the demand for high-purity alumina will increase from 7,737 tons in 2013 to 29,122 tons in 2016, with a compound growth rate of 55.5% in three years, and a combined market space of 3.86 billion in 2016. yuan. In addition, with the continuous advancement of domestic corporate technology, leading domestic companies with advanced technology and high cost performance will rapidly realize import substitution, and they will enter the international market to export high purity alumina.
The company's layout of high-purity alumina business in 2015 ushered in the outbreak of performance. The company announced the establishment of a holding subsidiary to develop the high-purity alumina business. It is expected that the joint venture company will achieve production capacity of over 1,000 tons at the beginning of 2015. Lithium Battery Applications At present, only one company in the company has passed the certification of many domestic and foreign mainstream battery manufacturers. Sapphire also cooperates with several well-known domestic and foreign companies. We believe that the production capacity of the company's high-purity alumina can be effectively digested after it is put into operation. It is expected that the joint venture will achieve sales of 1,000 tons in 2015, realize sales revenue of 100 million yuan, and contribute approximately 30 million yuan in profits.
