The company disclosed the third quarterly report of 2023: in the first three quarters of 2023, it realized revenue of 188.404 billion yuan (year-on-year-17.23%), net profit of 5.352 billion yuan (year-on-year-0.85%), and net profit of 4.930 billion yuan deducted from non-parent (year-on-year +10.76%). Among them, the revenue in the third quarter was RMB 54.342 billion yuan (year-on-year-20.85% and month-on-month-19.83%), the net profit attributable to parent was RMB 1.936 billion yuan (year-on-year +105.35%, month-on-month +20.70%), and the net profit deducted from non-parent was RMB 2.046 billion yuan (year-on-year +233.80%, month-on-month +60.52%).
The year-on-year decrease in revenue in the first three quarters was mainly due to two reasons: 1) the company optimized the trade structure and regulated some low-margin trade businesses;2) the aluminum price decreased, and the average price of A00 aluminum 2022Q1-Q3 including tax in Yangtze River Nonferrous Metals Market was 20,322.58 yuan/ton, and the average price of 2023Q1-Q3 including tax was 18,611.98 yuan/ton.
Profitability increased significantly and asset-liability ratio decreased steadily. In the first three quarters, the gross profit margin of the company was 11.33%,+0.50pp year-on-year; the net profit margin was 4.88%,+0.79pp year-on-year; the expense ratio during the period was 6.41%,+1.86pp year-on-year. In the third quarter, the gross profit margin of the company was 15.77%, month-on-month +5.85pp; the net interest rate was 6.65%, month-on-month +2.69pp. As of September 30, 2023, the Company's asset-liability ratio was 54.34%, representing a decrease of 1.27pp as compared with June 30, 2023, and the asset-liability ratio maintained a steady decline. The improvement of profitability in the third quarter of the company is mainly due to the improvement of single ton profit of electrolytic aluminum. According to our calculation, the profit of Yunnan Hydropower Aluminum in the third quarter increased by about 1,000 yuan/ton compared with that in the second quarter; the profit of Shandong Thermal Power Aluminum in the third quarter increased by about 550 yuan/ton compared with that in the second quarter.
23Q3 Company's primary aluminum output month-on-month +22%, alumina output month-on-month basically flat. Company 2023Q1-Q3 Output: Metallurgical alumina 12.46 million tons (Year-on-year-7.35%), fine alumina 2.83 million tons (Year-on-year +6.19%), primary aluminum 4.93 million tons (year-on-year-3.78%), coal 9.69 million tons (year-on-year +19.19%);23Q1-Q3 sales volume: self-produced metallurgical alumina export volume 5.01 million tons (year-on-year +7.84%), primary aluminum export volume 4.94 million tons (year-on-year-3.56%), sales volume of external power plants 11.3 billion kwh (year-on-year-1.74%). Company 23Q3 Output: Metallurgical alumina 4.23 million tons (chain-0.47%), fine alumina 950,000 tons (chain +23.38%), primary aluminum 1.87 million tons (chain +22.22%), coal 3.47 million tons (chain-1.42%);23Q3 sales volume: self-produced metallurgical alumina export 1.58 million tons (chain-11.24%), primary aluminum export 1.88 million tons (chain +27.03%), export power plant 3.8 billion kwh (chain +5.56%).
Risk warning: electrolytic aluminum demand is less than expected; raw material prices lead to electrolytic aluminum profitability decline.
Investment advice: downgrade earnings forecast and maintain "overweight" rating. It is estimated that the operating income of the Company from 2023 to 2025 will be CNY 2,886.96/2,936.48/2,98.21 billion, with a year-on-year growth rate of-0.79%/1.72%/1.55%; the net profit attributable to parent company will be CNY 69.22/84.26/95.88 billion, with a year-on-year growth rate of 65.12%/21.73%/13.80%; Diluted EPS is 0.40/0.49/0.56 yuan, and PE corresponding to current stock price is 14.9/12.2/10.7x. Considering that the Company is a leading large-scale non-ferrous central enterprise, has a complete aluminum industry chain, and still has the ability to expand production capacity under the condition that there is a ceiling in the production capacity of the industry, it maintains the rating of "overweight".