Performance summary: according to the company's semi-annual report of 2023, the operating income of the company in the first half of 2023 was 9.219 billion yuan, down 19.46% from the same period last year; the net profit was 350 million yuan, down 41.28% from the same period last year; and the net profit after deduction was 304 million yuan, down 48.69% from the same period last year.
The aluminum foil industry has entered the de-depot cycle, and the company's performance is greatly under pressure. The sharp decline in the company's performance in the first half of 2023 is mainly affected by the decline in the prosperity of the aluminum foil industry. During the reporting period, due to the influence of the global economic environment, industry cycle and weak domestic and foreign demand, and faced with a long inventory cycle, the demand side of aluminum foil decreased significantly.
The decline in the aluminum foil industry has led to a decline in the company's profitability, with 2023H1's gross profit margin of 13.30%, down 1.05pct from 2022H1. From a quarterly point of view, the company's Q1 and Q2 achieved a net profit of 155 million yuan and 196 million yuan respectively. Taking into account the exchange gains generated by Q2, the real performance of Q1 and Q2 is basically the same.
The market space of battery foil is huge, and the production and sales are released quickly. Under the background of the national double carbon goal, the new energy industry has great potential for development, which is the main direction and profit point of the company's follow-up development. According to conservative estimates, GGII expects global power battery shipments to reach 1550G by 2025 and is expected to reach 3000GWh by 2030. The corresponding demand for aluminum foil for batteries is 542500 tons and 1.05 million tons respectively. On July 21, 2022, the company announced that it would invest in the construction of Inner Mongolia's "annual production capacity of 800000 tons of battery foil and matching blanks".
With the gradual commissioning of the Inner Mongolia project and the further expansion of the company's production scale, the production and sales of battery foil products will continue to increase.
We will continue to improve the global layout. With the implementation of the IRA Act of the United States and the anti-dumping of aluminum strip and foil products originating in China by the European Union, the export of aluminum foil in China will be restricted to a certain extent. The company has production bases in Thailand and Italy respectively. In addition, the company examined and passed the "bill on the acquisition of equity in foreign companies", acquired Slim aluminum in cash, the total price is expected to be 56.3 million. Slim Aluminium has two production bases in Sistner (Italy) and Metzburg (Germany) with a total production capacity of about 135,000 tons per year. After the completion of the acquisition, the company will have a complete industrial chain in Europe, including hot rolling-cold rolling-foil rolling and other processes, which can not only provide stable aluminum foil billets for the company's Italian subsidiary European MetalsSrl, but also produce and sell its own aluminum sheet and foil products, such as traditional products such as aluminum foil for food packaging and air conditioning foil.
Profit forecast and investment advice: as the leading enterprise of domestic aluminum foil products, the company continues to strengthen the global layout, and its scale advantage is significant. We adjust the company's profit forecast and estimate that the company's return net profit from 2023 to 2025 is 9.08,12.07 and 1.516 billion yuan respectively, EPS is 1.03,1.37 and 1.72 yuan respectively, and the closing price on August 31 is 15.3,11.5 and 9.1 times respectively, maintaining the "overweight" rating.
Risk tips: a sharp decline in downstream demand, substantial fluctuations in raw materials and energy costs, project production is not as expected.