Source: Daily Economic News

At the close of the annual report of Listed Companies in 2015, among the annual reports of thousands of listed companies, Zhongwang Holdings Co., Ltd. (hereinafter referred to as Zhongwang Holdings Co., Ltd.) has its own strong points: double-rise in net revenue, steady increase in performance, eye-catching performance in core business; considerable increase in profits in overseas markets, obvious increase in regional layout; and stable growth in Tianjin projects. Step by step, high value-added aluminium calender business prospects are promising. Industry analysts say that China Zhongwang's outstanding performance is mainly influenced by internal and external factors.

From the enterprise itself, a series of management measures such as continuous optimization of product structure, improvement of production efficiency and control of production costs have achieved considerable results. In recent years, Zhongwang has maintained a considerable growth rate for four consecutive years. Since 2012, Zhongwang's annual net profit has been 1.807 billion yuan in 2012, 2.127 billion yuan in 2013, 2.477 billion yuan in 2014 and 2.805 billion yuan in 2015, respectively. Its annual profit has maintained an increase of more than 13%.

From the external environment, Zhongwang's excellent performance is closely related to the development prospects of high-end aluminum processing industry. With the rapid development of domestic automotive lightweight, automotive aluminium alloy market has great potential. Guojin Securities believes that the annual composite growth rate of automobile aluminum alloy demand from 2014 to 2020 is about 20% - 25%, and the market space of automobile aluminum alloy is about 250 billion yuan by 2020. Zhongwang's products are widely used in transportation and other fields. The strong demand for automotive aluminium in China has played a positive role in promoting the development of Zhongwang and other aluminium enterprises. At the same time, in recent years, the national policy has repeatedly promoted the application of new energy-saving and environmental protection materials such as aluminium alloy in the manufacturing industry, which is very good for the development of domestic aluminium processing industry.

At present, the Tianjin high value-added aluminium calender project, which Zhongwang is steadily advancing in China, has a bright future. According to the report of Boston Consulting Company, China's aluminium alloy rolled sheet market will maintain a growth rate of about 10% in the next few years, reaching nearly 16 million tons by 2020, which is the main driving force for the growth of the global aluminium alloy rolled sheet market.

Profit marched up and revenue steadily increased

Zhongwang's revenue rose slightly, while net profit rose sharply. According to Zhongwang's annual report of 2015, the gross income of the group is about 16.171 billion yuan, net profit increased by 13.2% to 2.805 billion yuan from about 2.477 billion yuan in 2014, and earnings per share increased by 13.2% to about 0.4 yuan from the same period last year.

Compared with the past, Zhongwang 2015 Annual Report of China separated the income of deep processing business from the original aluminium extrusion business and presented it separately for the first time. Zhongwang, China, said that the group's current core revenue source is from the aluminum extrusion business and deep processing business. Due to the increasing importance of deep processing business, the financial information of deep processing business has been separated from the original aluminium extrusion business and presented separately since 2015 for the need of management and operation.

According to Zhongwang Annual Report of China, the group's aluminium extrusion business revenue in 2015 is about 15.392 billion yuan, which is basically the same as that in 2014. Profit from deep processing business is about 1.952 billion yuan, up 13.0% from 2014.

Zhongwang, China, said that by continuing to optimize product mix, improve production efficiency and control production costs, consolidating the comprehensive profitability, combined with the superposition effect of last year's decline in the price of aluminium ingots, the gross interest rate of aluminium extrusion business was further increased from 25.4% in 2014 to 30.0% in the reporting period, and that of deep processing business from 31.8% in 2014. It rose to 32.5% during the reporting period.

It can be seen that while maintaining the steady development of industrial aluminium extrusion business, Zhongwang is trying to tap more profit growth points, in which deep processing business is gradually growing into its important "cash cow". It is noteworthy that in the field of deep processing, Zhongwang, in addition to continuing to consolidate its traditional strengths, that is, the application of aluminium alloy deep processing products in rail transit, such as high-speed railway carriages, metro, urban light rail, etc., is also trying to diversify the types of deep processing products, including aluminium parts of new energy vehicles and buses, whose proportion in deep processing products is gradually increasing. 。

It is understood that Zhongwang has launched technical cooperation with many domestic bus manufacturers, such as Huachen Bus (Dalian) Co., Ltd., FAW New Energy Automobile Company of China, Hualong New Energy Automobile Co., Ltd. of Mingyang, Shenzhen Wuzhou Dragon Automobile Co., Ltd., and Yinlong New Energy Co., Ltd. of Zhuhai, to jointly develop all-aluminium bus with new energy.

The ability to cooperate with the above bus manufacturers is due to Zhongwang's comprehensive capability from independent design to manufacturing and processing. It is understood that Zhongwang made important breakthroughs in the design of new energy all-aluminium electric vehicle, the integrated design of aluminium alloy battery frame and the development and manufacture of related new materials last year. At present, we have jointly designed and developed new energy all-aluminium electric vehicles with Beijing Great Wall Huaguan Automobile Technology Co., Ltd. and Chery Automobile Co., Ltd.

According to the annual report, Zhongwang of China said that the group is very optimistic about the huge development potential of the deep processing market. It will steadily expand the deep processing capacity in view of the development of the downstream market, make full use of the group's R&D strength and customer resources, constantly enrich the types of deep processing products, improve business methods, vigorously expand the downstream application market, and improve the overall sales of high value-added deep processing products in the group. The proportion of sales and profit contribution.

Overseas markets are impressive

In addition to the outstanding performance of core business, the performance of Zhongwang overseas market in China is also outstanding. According to its annual report, the group's overseas earnings in 2015 were about 2.373 billion yuan, an increase of 9.0% over that in 2014. Regionally, Zhongwang's overseas customers are mainly located in the United States, Germany, the United Kingdom and other countries and regions. As China Zhongwang Group actively exploited overseas markets except the United States, sales revenue to Germany, the United Kingdom and other countries and regions increased by 88.7% from about 313 million yuan in 2014 to about 591 million yuan in the reporting period.

According to statistics from the General Administration of Customs, China's aluminium alloy exports totaled 535,300 tons from January to December 2015, a decrease of 6.17% compared with the same period last year. Why did Zhongwang's overseas market performance rise against the downward trend in domestic aluminium exports?

Industry insiders believe that diversified product categories will help China Zhongwang develop domestic and foreign markets. Taking the application of Zhongwang products in mechanical equipment and electric power engineering in China as an example, aluminium alloy has become an important material for upgrading industrial equipment. During the reporting period, Zhongwang and its customers jointly developed product upgrading schemes to accelerate the realization of aluminum substituting for steel, copper and aluminum saving in the industrial field. These measures have been very effective in improving China's loyalty and prosperity. The growth is remarkable in overseas markets, including the Netherlands, Britain, Belgium, Germany and Japan.

In order to expand the export market outside the United States, Zhongwang of China also set up new subsidiaries in Japan and Germany in 2014, focusing on developing the aluminum market in relevant countries. "European and American markets are mainly high-end and leading products in the application of industrial aluminium extrusion products, which has a very good guiding role in judging the trend of domestic market products and research and development." China Zhongwang officials said that Zhongwang will continue to expand its overseas market, either to enhance its global competitiveness or to enhance the company's market foresight.

Tianjin project has broad prospects

Among the three main businesses in Zhongwang, the profitability of aluminium calendering business will show up with the steady progress of Tianjin project and the gradual putting into operation, compared with the performance contribution of industrial aluminium extrusion and deep processing business.

It is understood that the high value-added aluminium calendering material project of Zhongwang in Tianjin Wuqing District is progressing smoothly. The first production line of the first phase has entered a critical stage before its formal commissioning. The annual design capacity of the first phase of the aluminium calendering material project is 1.8 million tons, which consists of two production lines. The first production line is mainly made of aluminium alloy medium and thick plates, with an annual design capacity of 600,000 tons. In retrospect, the factory building and equipment installation of the first production line were completed in the year. After the trial operation of the core and supporting production equipment, the final stage of optimization debugging is currently under way.

In the third quarter of last year, aluminium alloy flat ingots were successfully cast at one time in the casting workshop, which laid a solid foundation for the smooth development of aluminium calendering production. Hot rolling and cold rolling production lines successfully produced the first aluminum alloy sheet and the first aluminum alloy coil in the second half of last year, marking the progress of the aluminium calendering project. At present, the production line is carrying out final debugging of different alloy products and trial production of some customer sample orders.

The person in charge of Zhongwang Tianjin project in China said that the first batch of aluminium sheets and coils produced in the second half of last year provided valuable references for the optimization of production parameters and laid a good foundation for the smooth commissioning of the whole production line. Tianjin's high-value-added aluminium calender project will become the largest and most complete single aluminium calender production base in the world after its completion. This project will fill the gap of domestic commercial production capacity in the lead area of high-end aluminium sheet, meet the growing needs of China for high-end aluminium sheet and strip products, and provide high-quality and high-value-added aluminium calender products for Chinese and overseas markets.

For future development planning, Zhongwang of China said that in addition to focusing on the implementation of the first production line of Tianjin Aluminum calendering project, continuing to implement the capacity optimization and expansion plan, increasing the proportion of high value-added products, and strengthening technology research and development and product innovation, the recent business splitting and borrowing of Zhongfang A-share listing plan is an important work. If the split-up and listing is successfully completed, it will help Zhongwang to use a broader financing platform and release the overall intrinsic value of the group.

Industry insiders believe that in the long run, Zhongwang China will become an enterprise with three core businesses of industrial aluminium extrusion, deep processing and aluminium calendering, which will lead the development of the industry in the tide of industrial upgrading in China.