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China Knowledge initiates research coverage on Zhejiang Wanfeng Auto Wheel

minutes 2020/11/18 04:53:33

Nov 18, 2020 (China Knowledge) - Singapore-based China Knowledge’s research arm has initiated coverage on Zhejiang Wanfeng Auto Wheel Co Ltd (002085), a Shenzhen-listed company that has grown from being a leading auto wheel manufacturer to the world's top producer of aluminum alloy auto wheels, magnesium alloy auto parts, and piston-engine aircrafts.

According to Charles Chaw, Managing Director at Shanghai-based office, Wanfeng Auto Wheel’s global blueprint has produced impressive results and is set to benefit from their strong brands and top spots in the businesses Wanfeng Auto operates worldwide.

Some of the investment highlights in this report include the company’s 55% equity stake in global aircraft brand ‘Diamond’ with production facilities in Austria, Canada, and China, has taken the top three positions amongst the aircraft manufacturer in general aviation. It is also the first company in the world to use all- composite materials to make its entire fuselage. The Diamond brand currently holds 40% flight training aircraft market in China.

As the world's largest magnesium alloy auto parts supplier, the global demand for magnesium alloy products mainly derives from the automotive (70%), communications and electronics, and 3C industries (20%) will likely to take off as governments and environmentalists advocate the use of magnesium used for auto cars. With the company’s advancement of lightweight technology and the collaborative innovation of magnesium alloys for automobiles (in cooperation with FAW, Dongfeng Motor, and Chang'an Automobile), large-scale industrial applications of magnesium alloys in the automotive industry will continue to stay on an upward trajectory.

Last week its subsidiary, Meridian Lightweight Technologies, has won the 2020 International Magnesium Association (IMA) Automotive Cast Product Design Award with collaboration with General Motors, adding to its accolade of awards. This award-winning design provides high rigidity and better fracture resistance at key locations of vehicle side collisions.

The new 14th “Five-Year Plan” to be implemented from 2021 – 2025 will see favorable policies that will benefit wheel manufacturers like Wanfeng Auto Wheel whereby Chinese car owners could modify or change their auto wheels which currently are restricted due to vehicle-control rules. Another positive development from the new Five-Year Plan could be the relaxation of low attitude flying, if implemented in large geographical territories the demand for general aviation aircrafts will be enormous. Its gradual build-up of Diamond Aircraft’s manufacturing, repair workshops, and training facilities in China will also offer Wanfeng Aircraft the advantage and proximity to the Chinese market.

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