The company's performance increased by 110% in the first half of 2021.

Shunbo Alloy announced its results for the first half of 2021. The company's first-half operating income was 4.202 billion yuan, an increase of 134.33% over the same period last year, and its net profit was 156 million yuan, an increase of 109.93% over the same period last year. Deducting 138 million yuan of non-parent net profit, an increase of 101.51% over the same period last year, the net cash flow generated by operating activities was-232 million yuan, down 254.64% from the same period last year. The year-on-year increase in the company's profit is mainly due to the high growth in production and sales. In the first half of the year, the company sold 276100 tons of recycled aluminum alloy, an increase of more

Steady profitability and diversified production capacity layout

Although aluminum prices have fluctuated greatly since 2015, the gross profit margin of the company's products has always been around 6%, and its net profit has fluctuated around 4%. Due to the company's high operating turnover rate, its ROE has always been above 10%. The company has diversified production capacity, and now has four production bases in Chongqing, Guangdong, Jiangsu and Hubei, which can radiate the major consumer markets in Southwest, South China, East China and Central China.

Investment advice: buy rating

Assuming that the domestic price of recycled ingots remains at the current level, it is estimated that the average annual sales price of recycled alloy ingots of the company from 2021 to 2023 is 16648 yuan / ton, and the gross profit per ton of the company's aluminum alloy products remains at the level of the first half of 2021. The company's revenue from 2021 to 2023 is expected to be 101 shock 121 billion yuan respectively, a year-on-year growth rate of 107 pound 20 pound 25%, and net profit of 3.32 pound 4.18 billion yuan respectively. The year-on-year growth rate is 69.6, 25.8 and 18.8 percent. Diluted EPS= 0.76 shock 0.95 pound 1.13 yuan, the current share price corresponds to PE=25.7/20.4/17.2X. Considering that the company is the leading recycled aluminum production enterprise in China, the company's production capacity layout is reasonable, the future production capacity is further expanded, and the layout aluminum ash treatment project is expected to bring new profit growth points to the company, the company will fully benefit from the accelerated development of the recycled aluminum industry and will be given a "overweight" rating for the first time.

Risk hint

The progress of the new project is not as expected, and the market demand is less than the expected risk.