Beijing Lier Industry Upgrade, "Overweighting" Development

[China Aluminum Network] benefited from the upgrading of the steel industry and industry consolidation.

Beijing Lier is the leading company in the production of refractory materials for steel. Although the total amount of steel is limited, the industry still maintains growth, but the growth rate has slowed down. In addition, the steel industry is stepping up adjustments to the internal structure of its products, and the demand for refractory materials has increased during the upgrade of process technologies. Both large and small steel mills are undergoing technological transformation and the process flow is elongated. Ordinary refractories may use 50 yuan per ton of steel, new refractories may reach 80 yuan. The demand for high-grade refractories in the process of industrial upgrading will increase. On the other hand, strengthening the integration of steel companies is also more conducive to the elimination of outdated small and medium-sized refractories enterprises, and promote integration and merger of refractory companies. At present, the degree of concentration of the industry is very low. Upgrading and integration of the upstream industry to promote the whole package model is conducive to the rapid capture of market share.

The capital advantage boosts the company's rapid growth and strength.

Beijing Lial IPO raised a total of 1.333 billion yuan in net proceeds. With cash in hand, the company will continue to use various advantages to expand its production capacity or to acquire and acquire mergers. In the future, the company plans to improve the three major production bases in Beijing, Shanghai and Luoyang. At the same time, it will also develop refractory raw materials such as magnesia and bauxite upstream industries, and gradually build high quality bauxite and magnesia two raw materials. The company's capacity expansion is fast and the added value of the project's products is high. The rapid expansion is not only in line with the current status and changes in the refractory industry, but also helps the company quickly establish its leading position.

Earnings forecast and investment rating.

The Beijing Lier-owned industry is in the process of increasing the degree of concentration. The company's capital, business model, management, product technology, and customer advantage guarantees and prompts the company to grow rapidly, making it faster and stronger. It is estimated that the revenue for the years 11-13 will be 1.078 billion yuan, 1.998 billion yuan and 3.712 billion yuan respectively, corresponding to EPS of 0.56 yuan, 1.05 yuan and 2.23 yuan respectively. The current valuation is low. The company's stock has a strong long-term investment value. Maintain "overweight" rating.

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