Nanshan Aluminum Forces High-end Aluminum Processing

On December 7, Nanshan Aluminium (600219) issued an announcement that all the new shares issued by the company to Shandong Yili Electric Power Co., Ltd. (hereinafter referred to as “Yi Li Electric Power”) to issue shares to purchase assets have all been listed. The listed company and Yili The electric power industry has also signed the "Assignment of Assets Transfer Confirmation Letter" to confirm that the assets delivery date is December 1, 2016. From the date of asset settlement, the subject matter of the trading company's assets of Yili Electric was actually occupied and operated by the listed company.

At this point, Nanshan Aluminum officially announced the completion of the transaction of the assets of the Group’s Yili Electric Power Co., Ltd. with a consideration of 7.16 billion yuan. The acquisition will open up a complete industrial chain consisting of Nanshan Aluminum and Yili Electric's asset package, and inject the company's large-scale and competitively competitive electrolytic aluminum business-related assets. After the completion of the transaction, the company's electrolytic aluminum supply capacity will increase from 136,000 tons to 816,000 tons, and related transactions will be greatly reduced.

In order to protect the interests of small and medium shareholders, Nanshan Aluminum signed a Performance Commitment Compensation Agreement with Yili Electric in order to protect the interests of small and medium shareholders. Yili Electric Co., Ltd. promised that Yili Electric's asset package is expected to be realized in 2016, 2017 and 2018. The total net profit is not less than RMB 1.8 billion. If this number is lower than this amount, the difference will be compensated by Yili Electric in cash. This move undoubtedly demonstrates that Yili Electric has full confidence in the standard's continued profitability.

It is reported that in the context of continuous decline in aluminum prices last year, a large number of electrolytic aluminum companies including a number of leading companies suffered huge losses or even production shutdowns, but they adopted a self-provided power plant power generation-electrolytic aluminum production chain integration development strategy. Yili Electric's asset package still achieved a total annual profit of 460 million yuan, which shows that Yili Electric has a solid foundation for the confidence in the asset package's profitability.

The Nanshan Aluminum announced in early August that “Shandong Yili Electric Co., Ltd. proposed to transfer the simulated financial statements of the underlying assets and liabilities of the audit report” shows that the company achieved a net profit of RMB 174 million from January to March 2016, according to which, this year it was completed. An average annual net profit of RMB 600 million will be a high probability event. At the same time, according to the recent aluminum prices, aluminum prices have risen to 13,500 yuan/ton. If aluminum prices remain at this level, the average price of aluminum products this year will exceed the average price of aluminum products last year, and the company's future performance will also increase significantly.

Since the beginning of this year, the development of Nanshan Aluminum's owner-operated business has continued to increase. In addition to the successful acquisition of Yili Electric's asset package to make up for the shortcomings of the entire industry chain, the company has mainly developed new energy battery foils that are currently attracting attention. In terms of industrial materials, the company continued to strengthen strategic cooperation with Qingdao Sifang and CIMC, and increased order mining in aerospace, high-speed rail, power pipe sticks, containers, conductive tracks, semitrailers, tankers, air cooling systems, and subway screen doors. , customer development and new product research.

In particular, it is worth noting that the company has achieved significant results in the layout of the aviation sector. In October of this year, the company and Boeing signed an agreement for the supply of aerospace aluminum panels to enter the aviation aluminum sector, laying a solid foundation for the future expansion of aluminum sheet manufacturing business, expansion of aluminum extrusions and aluminum-titanium forgings business. The Northeast Securities Research Report predicts that the global aviation market will maintain rapid growth in the next 20 years, and it is estimated that the annual aviation aluminum market will be over 400,000 tons. The company will compete directly with international aluminum giants such as Alcoa and seize the high-end market for deep processing of aluminum.

In addition, the company seized the opportunity for the rapid development of new energy passenger vehicles worldwide and entered the light vehicle market. This year, it has officially launched a production project with an annual output of 200,000 tons of oversized and high-performance special aluminum alloy materials. The main products are: There are two series of plates and plates, covering automotive panels and aerospace panels. The company's domestic automotive aluminum alloy plates have been delivered in small quantities in the maintenance market, and North America has also been tested.

In fact, after the acquisition of the Yili Electric Assets Group's transaction was approved and approved by the China Securities Regulatory Commission, a number of brokerage researchers paid attention to Nanshan Aluminum and issued a promising research report. Haitong Securities Research reported that the company is committed to the development of high-end aluminum processing products, and will enhance the product structure based on the original complete industrial chain, which will enhance the company's core competitiveness and profitability. Guohai Securities Research reported that the company’s acquisition of Yili Electric Co., Ltd. complements the upstream puzzle, while the company has an earlier layout in the high-end aluminum processing sector and is expected to achieve the first breakthrough, thus building the company’s core competitiveness.