Event: the company issued a forecast of results for the first three quarters of 2022. In the first three quarters, the net profit is expected to be 1.6-165 million yuan, + 618.41% and 64.886% compared with the same period last year, of which Q3 is expected to achieve a net profit of 3933.4344,3343 million yuan, which is + 868.4% and 991.5% compared with the same period last year.
The pattern of supply and demand is excellent, and the performance driven by the high prosperity downstream continues to exceed expectations. Aluminum foil downstream market demand is strong, core battery, new energy vehicle manufacturers accelerate production expansion, driving upstream battery aluminum foil demand growth. The company put 40,000 tons of high-precision battery aluminum foil into production at the end of the 21st year, and its production capacity continued to climb in the first three quarters. Thanks to fine production control and imported equipment, it is expected to continue to increase the net profit per ton and improve production efficiency in the future. In addition, the excellent supply and demand pattern also promoted the rise of aluminum foil processing fees, the company's aluminum processing business volume rose in the first three quarters, and the performance continued to exceed expectations.
Optimize cost control and improve profit stability. Aluminum processing is in the middle of the industrial chain, with the collection of processing fees as the main source of profit, and the fluctuation of the price difference of aluminum ingots has a great impact on profitability. the company takes a variety of measures to deal with cost fluctuations: 1) carry out foreign exchange hedging; 2) widen the purchasing channels of aluminum foil billets and expand the upstream industrial chain to increase business coordination. At present, Anhui Zhongji and Sichuan Wanshun Zhongji have built and under construction aluminum strip production capacity to ensure the source of raw materials and bring cost advantages. 3) negotiate with customers to adjust the settlement pricing period and increase the processing fee, the company has negotiated with a number of foreign customers to shorten the pricing period to the average LME price one month before shipment, realizing the price linkage between the price and the aluminum price to a certain extent. Therefore, the company can still maintain a high and stable profit level in the context of the upward Q3 aluminum price.
Coated carbon foil and PET copper film have the advantage of first-mover, opening up the space for future growth. With the accelerated development of downstream energy storage batteries, the demand for carbon foil is expected to increase rapidly. Through the acquisition of Shenzhen Yuqiang cut into the high value-added carbon foil track, the planned 5wt carbon foil production capacity to advance in an orderly manner. In addition, the company is also speeding up the process optimization of PET copper film and sample delivery by key battery enterprises, which is expected to bring higher benefits after achieving stable output. The new business extension opens up room for future growth. It is estimated that the net profit for 22-24 is RMB 2.67, 375, and 485 million yuan, respectively, compared with the same period last year. + 708%, 40.2%, 29.4%.
Corresponding PE 27.2X/19.4X/15.0X respectively. Maintain a "buy" rating.
Risk hint. Risks such as sharp rise in raw material prices, lower-than-expected production capacity, intensified market competition, exchange rate fluctuations, repeated epidemic situations, and so on.