The company released its 2022 annual report
The company released its 2022 annual report. The company achieved revenue of 69.32 billion yuan in 2022, an increase of 16.64% over the previous year; achieved net profit of 1,089 million yuan, an increase of 25.36% over the previous year; and achieved net profit of 1,065 million yuan after deducting non-return mother's net profit of 1,065 million yuan, an increase of 29.57% over the previous year. Among them, revenue for Q4 2022 was 17.114 billion yuan, a decrease of 0.7% over the previous month; net profit returned to the mother was 225 million yuan, an increase of 21% over the previous month; net profit after deducting non-return to the mother was 215 million yuan, an increase of 21.5% over the previous month.
The aluminum processing business grew steadily, and revenue and profit reached record highs
Volume: Production in 2022 was 4,22221 million tons, up 13.94% from the same period last year, of which bar production was 3.1222 million tons (+16.8% year on year), profile production of 99,800 tons (+32.5% compared with the same period last year), plate and foil production of 5027 million tons (-2.65% compared with the same period last year), production of aluminum bars and cables (+1,297% year-on-year), and 364.54 million structural components (-20.29% year-on-year); Revenue: The products in the above segments were 46.35 billion, 2984 million, respectively 10.04 billion, 9.113 million and 195 million, accounting for 66.9%, 4.3%, 14.5%, 13.1% and 0.3% of revenue, respectively;
Gross profit: The gross margins of the above product segments were 1,097 million, 614 million, 413 million, 232 million, and -16 million, respectively; gross margins were 2.37%, 20.58%, 4.12%, 2.58%, -8.05%, and +0.09pct, -1.45pct, +0.39pct, +0.67pct, -4.64pct respectively.
Fundraising projects are progressing steadily, and green aluminum processing can be expected to grow.
According to the company's annual report, the processing projects under construction include the “Intelligent Upgrading and Renovation Project for High-Strength and High-Strength Aluminum Alloy Material Production Equipment with an Annual Output of 500,000 Tons” and Yunnan's “Project for Lightweight High-Strength Aluminum Alloy Materials with an Annual Output of 1.2 Million Tons (Phase II Project)”.
At present, the company has put into operation two recycled aluminum projects, namely the innovative metal technology transformation project with an annual output of 300,000 tons of high-quality recycled aluminum alloy materials, and the innovative renewable resources project with an annual output of 200,000 tons of high-quality recycled aluminum. In 2022, the company used about 686,500 tons of recycled aluminum, an increase of 30.17% over the previous year, and has planned seven recycled aluminum projects, including bars and foil sections, at various major production sites in Shandong, with a total volume of 2.05 million tons. Currently, there are two recycled aluminum projects under construction, namely the 500,000 ton high-quality recycled aluminum alloy material project of Shandong Innovation Renewable Resources Utilization Co., Ltd. and the 500,000 ton high-quality recycled aluminum project of Shandong Chuangyuan Renewable Resources Co., Ltd. At present, they have completed the signing of contracts for imported equipment from abroad, such as hydraulic systems for foundry machines, feeders, etc., and infrastructure construction has basically been completed. The estimated production time is September 2023, and production will be completed in April 2024.
Investment advice:
The estimated revenue for 2023-2025 is 719.50, 735.84, and 74.411 billion yuan respectively, and the estimated net profit is 1,272, 1,440 million yuan, and 1,513 billion yuan. The corresponding EPS is 0.32, 0.36, and 0.38 yuan/share respectively. The current stock price corresponding to PE is 19.0, 16.8, and 16.0 times. Maintain the “Buy-A” rating and target price of 6.97 yuan/share for 6 months.
Risk warning: demand falls short of expectations, raw material prices fluctuate greatly, and project progress falls short of expectations