Items:
Shenhuo shares achieved operating income of 19.109 billion yuan in the first half of the year,-11.72% year-on-year, net profit of 2.739 billion yuan, year-on-year-39.59%, and basic earnings per share of 1.22 yuan. At the same time, it was announced that it was decided to purchase 9.90% of Yunnan Shenhuo held by Henan Asset Fund and 4.95% of Yunnan Shenhuo held by Shangqiu Xinfa by way of agreement transfer, with the purchase price of 966 million yuan and 483 million yuan respectively. Upon completion of the transaction, the company will hold 58.25% of Yunnan Shenhuo.
Comments:
In the first half of the year, the performance of the coal sector was dragged down by coal prices, and the profit of electrolytic aluminum rebounded month-on-month. From January to June 2023, the company produced 726800 tons of electrolytic aluminum and sold 732300 tons, completing 43.78% and 44.12% of the annual plan respectively, sales volume-5% and month-on-month-15%, coal production 379.90 tons and sales volume 3.8779 million tons, respectively, 54.19% and 55.32% of the annual plan, respectively. According to the split of operating income and operating cost disclosed by the company, the price per ton of H1 electrolytic aluminum in 2023 is 16586 yuan, year-on-year-12%, month-on-month ratio + 3%; unit ton cost 12764 yuan, year-on-year-1%, month-on-month ratio + 1%, gross profit per ton 3822 yuan, year-on-year-36%, month-on-month ratio + 10%; coal per ton price 1141 yuan, year-on-year-29%, month-on-month ratio-15%; unit ton cost 573 yuan, year-on-year-16%, month-on-month ratio-18% The gross profit per ton is 569 yuan,-38% compared with the same period last year and-13% compared with the previous year.
The company actively arranges 110000 tons of green hydropower aluminum foil project and 400000 tons of carbon project in Yunnan, moving forward to the integration of upstream and downstream of aluminum. In the upstream, in order to give full play to the advantages of Yunnan green hydropower and aluminum industry, further improve the company's industrial chain, give full play to the synergy of industrial chain, and improve the company's overall anti-risk ability, Yunnan Shenhuo invested 1.4 billion yuan to build an annual carbon project with an annual output of 400000 tons, which is part of the Yunnan Green Hydropower and Aluminum Integration Project and is in line with the national industrial policy and the company's development strategy. Downstream, the company will actively promote Shangqiu 60,000 tons of new energy power battery material project put into operation, Yunnan 110000 tons of green new energy aluminum foil project to speed up the construction, forming a new benefit growth point. The company's upstream and downstream integrated industrial chain is becoming more and more perfect.
It is proposed to acquire 14.85% of the shares in Yunnan Shenhuo Aluminum Co., Ltd., and further increase the proportion of rights and interests in Yunnan electrolytic aluminum.
In order to further adjust and optimize the asset structure, focus on the main business, and enhance the company's core competitiveness, the company decided to purchase 9.90% of Yunnan Shenhuo held by Henan Asset Fund and 4.95% of Yunnan Shenhuo held by Shangqiu Xinfa by agreement. The acquisition consideration is 966 million yuan and 483 million yuan respectively. After the completion of this transaction, the company will hold a 58.25% stake in Yunnan Shenhuo. After this acquisition, the company will further improve the production capacity of electrolytic aluminum rights and interests in Yunnan, which has cost advantages, which will help to enhance the company's core competitiveness.
Profit forecast and investment suggestions: currently at the end of the macroeconomic inventory cycle, the replenishment stage is approaching, the decline in the cost of electrolytic aluminum raw materials drives the overall profit level of the industry to pick up; the company is actively expanding the upstream and downstream industrial chains. it is expected to enhance the growth space in the future. We estimate that from 2023 to 2025, the operating income will be 378.57 million yuan (41.909 billion yuan), and the net profit will be 57.41 billion yuan / 65.45 billion yuan (the previous figure is 78.8887.76 billion yuan), which is 3.4% compared with the same period last year. Shenhuo shares are divided into two main sectors: coal and electrolytic aluminum. we use segment valuations for the two businesses according to comparable companies, and give them 5 times and 10 times respectively in 2023 according to comparable companies in the same industry. Shenhuo shares have a reasonable market capitalization of 44.4 billion yuan, corresponding to a share price of 19.74 yuan, compared with 34% room at present, to maintain the "recommended" rating.
Risk tips: (1) overseas recession exceeded expectations; (2) domestic economic recovery was lower than expected; (3) the company's coal mine operation encountered administrative interference.