Core ideas:
The advantages of the integration of coal, electricity and aluminum will continue to appear.
The company has a complete industrial chain of "coal-electricity / carbon-electrolytic aluminum-aluminum processing". The core product is electrolytic aluminum, and cost is the key. The company buys all alumina. The company's power self-sufficiency rate is 74%, and carbon self-sufficiency rate is 54%. The future cost change mainly comes from the improvement of coal self-sufficiency rate. The company has six coal production enterprises with a coal production capacity of 2.25 million tons, an output of 920000 tons, a self-use rate of 200000 tons, and a capacity utilization rate of 40%. There is great potential to improve the self-sufficiency rate, and the advantages of coal-electricity-aluminum integration will continue to appear.
Electrolytic aluminum benefits from rising aluminum prices, and deep processing is released into capacity.
The company's electrolytic aluminum production capacity is 740000 tons, 16 years electrolytic aluminum production and sales volume 710000 tons, self-use about 430000 tons, export about 260000 tons, tons of aluminum excluding tax price 10514 yuan / ton, ton aluminum cost 8587 yuan, ton aluminum gross profit of 1927 yuan. It is expected that with the supply-side reform of the electrolytic aluminum industry, the supply end of the aluminum industry will gradually shrink, aluminum prices are expected to rise, the company's electrolytic aluminum business benefits obviously.
The volume and price of aluminum business has risen simultaneously: 1) with an aluminum production capacity of 750000 tons and output of 430000 tons in 16 years, it is expected that there will be a potential increase in capacity utilization in the future; 2) the price difference between the company's aluminum price and that of aluminum ingots in 15 years is about 400 yuan / ton, which has increased to 661 yuan / ton in 16 years. It is expected that with the upgrading of the company's products, profitability has the potential to improve.
Investment suggestion
Under the background of the supply-side reform of the electrolytic aluminum industry, aluminum prices are expected to rise in the future, while the company's aluminum production and processing fees are expected to rise. The company's EPS in 17-19 is expected to be 0.22,0.36 and 0.52 yuan respectively, and the PE of the corresponding stock price is 26 times, 16 times and 11 times respectively.
Risk hint
The progress of supply-side reform is lower than expected, and the progress of capacity release is lower than expected.
