Event description:
(1) Aluminum industry: electrolytic aluminum inventory continues to disappear rapidly, with LME and SHFE aluminum inventory totaling 737000 tons, and the stock removal rate has been maintained at 32,000 tons per week in the last three weeks. according to our "inventory cycle change model", the current inventory removal rate is too fast for five years, which confirms that the downstream seasonal purchasing demand is active.
(2) according to the company's annual report in 2018, the annual revenue was 4.87 billion yuan, down 18.9% from the same period last year; the net profit returned to the mother was 181 million yuan, an increase of 50.4% over the same period last year; earnings per share were 0.53 yuan; sales, management and financial expenses were 177 million yuan, 972 million yuan and 801 million yuan respectively.
Event comments:
Inventory deregulation, real estate completion benefits, economic expectations improve, aluminum prices hit bottom and rebound. At present, the de-inventory rate of electrolytic aluminum is too fast for five years, which is mainly due to the peak season of nodular procurement, the demand of traders for de-inventory brought about by tax reform, and the recovery of downstream applications. Electrolytic aluminum, as a kind of post-cycle variety of real estate, accounts for more than 30% of the application, benefiting from the demand-pulling effect of the real estate completion cycle on metal. According to the latest quotation of Baichuan Information, the current price of alumina is 2695 yuan / ton, which continues to decline, while last year's price peak was 3265 yuan / ton, while the current SHFE aluminum price is 14.10 million yuan / ton, which leads to the expansion of electrolytic aluminum profit space.
The product structure is gradually optimized, and the layout of new materials is expected. The company currently has a high purity aluminum production capacity of 42000 tons, electronic aluminum foil production capacity of 35000 tons, electrode foil production capacity of 16 million square meters, obvious capacity advantages, with the weakening of alumina prices, aluminum price hub rise, the company's performance is expected to speed up. At the same time, taking advantage of the technology of "Beijing Institute of Aeronautical Materials", the graphene / aluminum composite technology developed by the company is expected to improve the strength and conductivity of aluminum cables. so as to meet the urgent demand of elevated transmission lines for new aluminum conductor cables with high strength and good conductivity, and has a broad application prospect in the future.
Profit forecast and investment advice: it is estimated that the return net profit of the company from 2019 to 2021 is 2.15,2.55 and 307 million yuan respectively, and the EPS is 0.25,0.3,0.36 yuan respectively.
Risk hint: the price of alumina rises sharply, the price of electrolytic aluminum fluctuates sharply, and the demand for aluminum foil is lower than expected.