Report Summary of Zhuomei Convertible Bond Investment Value Analysis 1. Report Industry Investment Rating No specific investment rating for the industry is provided in the report. 2. Core Viewpoints - The substitution of magnesium alloy for aluminum alloy in the automotive parts field is clear and accelerating, and Zhuomei Convertible Bond is currently overvalued but worthy of continuous attention [5][7] 3. Summary by Relevant Catalog Zhuomei Convertible Bond Information - Zhuomei Convertible Bond (123260.SZ) has a credit rating of A+, a bond balance of 450 million yuan, is a new bond with a remaining term of 5.93 years. The closing price on December 3 was 168.55 yuan, and the conversion premium rate was 81.76% [1] Star Source Zhuomei (Stock of Underlying Bond) Information - Star Source Zhuomei (301398.SZ) was established in 2003, focusing on the automotive lightweight field and applying magnesium alloy die - castings to body structural parts and interior parts. Its products include headlight heat dissipation frames, seat armrest skeletons, etc. From January to the third quarter of 2025, its revenue was 292 million yuan, a year - on - year increase of 1.48%; the net profit attributable to the parent was 45 million yuan, a year - on - year decrease of 19.63%. The actual controllers are Qiu Zhuoxiong and Lu Manfen, with a combined shareholding of 70.13%. The latest total market value is 5.432 billion yuan, and the expected PE in 2025 is 67.8x [3] Main Highlights of Zhuomei Convertible Bond - In the automotive parts field, the substitution of magnesium alloy for aluminum alloy is clear and accelerating. In May 2025, Seres completed the real - vehicle verification of an integrated die - cast magnesium alloy vehicle body, with a weight reduction of 21.8% compared to the aluminum alloy solution. The substitution is mainly due to the fact that the price of magnesium ingots has been lower than that of aluminum ingots, and the raw material cost of magnesium alloy for the same - volume parts is about 12.47% lower than that of aluminum alloy. Also, the breakthrough in semi - solid injection molding technology has reduced the oxidation risk of magnesium alloy and promoted its application in core structural parts [5] - The company's on - hand orders support high - growth performance in the next three years. Since 2021, the company has been deploying semi - solid magnesium alloy injection molding technology, and in November 2025, it obtained a 2.021 billion yuan fixed - point order from a domestic new energy vehicle company, planning to mass - produce magnesium alloy powertrain housing parts in the third quarter of 2026. As of November 2025, the company's cumulative magnesium alloy orders in the past year totaled 4.094 billion yuan [5] - The improvement in production capacity matches the order fulfillment. In July 2025, Yizumi delivered the UN6600MGII Plus equipment to the company, helping it break through the production bottleneck of complex structural parts and improve product yield. In November 2025, the company successfully issued convertible bonds to raise 450 million yuan, which is planned to be used entirely for the project of an annual production of 3 million sets of high - strength large - scale magnesium alloy precision - formed parts for automobiles [6] Valuation and Suggestion of Zhuomei Convertible Bond - Based on the Shanxi Securities convertible bond valuation model, without considering stock price changes and the changes of call and downward revision clauses, the reasonable valuation of Zhuomei Convertible Bond is between 147 - 154 yuan, and it is currently overvalued. However, since the remaining term of the bond is still long, it can be continuously monitored [7]