Main points of investment

Affected by the destocking of the industrial chain, the profit was under pressure in the first half of the year, and the improvement of revenue and earnings in the second quarter was affected by the problem of destocking in the industrial chain and the 22-year overstocking of customers in Europe and the United States, resulting in a significant decline in market demand. In the first half of 2023, the company achieved operating income of 9.219 billion yuan, a decrease of 19.46% over the same period last year. The net profit belonging to the parent company was 350 million yuan, down 41.28% from the same period last year. In terms of financial expenses, the company's financial expenses in the first half of the year decreased by 73.08% compared with the same period last year, mainly due to the increase in deposit interest and exchange gains. In the second quarter, the company achieved operating income of 4.71 billion yuan, an increase of 4.47% over the previous month, and a net profit of 196 million yuan, an increase of 26.53% over the previous month.

In deep cooperation with global battery head customers, the company has a solid global leading position and works closely with leading global battery customers such as BYD, CATL, ATL, Guoxuan Hi-Tech, Honeycomb Energy, China Chuangxin Airlines and other leading battery customers. The company and its wholly-owned subsidiaries have signed global strategic cooperation agreements with LG New Energy, CATL Group and SK New Energy. In the first half of 2023, the company's domestic battery foil production market share reached 46%. In the first half of 2023, the company successively transferred the low value-added production line to the production of battery aluminum foil to quickly respond to the explosive demand of the downstream market.

Acquisition of European Slim Aluminum to further improve overseas Industrial chain Integration considered in February 2023 through the acquisition of 100% equity interests in Slim Aluminum and two wholly-owned subsidiaries, the total acquisition price is expected to be 56.3 million euros. Slim aluminum products, which include a variety of aluminum strips and foils for the packaging, automotive, transportation and construction industries, have two production sites in Sistner (Italy) and Metzburg (Germany) with a total production capacity of approximately 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 subsidiaries, but also produce and sell aluminum sheet and foil products themselves. such as traditional products such as aluminum foil for food packaging and air-conditioning foil to help the company expand its share of the European market.

Profit forecast and valuation

Downgrade earnings forecast and maintain "buy" rating. The company is the global leader of battery foil, leading the industry to accelerate the sea. Taking into account the declining demand for aluminum foil market, the company's profits are under pressure, we downgrade the company's 23-24 year net profit forecast for 10.28,15.73 (23-24 years before the reduction is 19.62,2.329 billion yuan respectively), the new 25-year return net profit forecast is 2.291 billion yuan, corresponding to EPS is 2.10,3.21,4.67 yuan, the current stock price corresponding to PE is 7,5,3 times, to maintain the "buy" rating.

Risk hint

The demand for new energy vehicles has declined, the competition in the industry has intensified, and the upstream raw materials fluctuate sharply in the short term.