Event: from January to September 2023, the company achieved operating income of 188.4 billion yuan, a decrease of 17% over the same period last year, and a net profit of 5.4 billion yuan, down 1% from the same period last year. In Q3 in 23, the company achieved operating income of 54.342 billion yuan, a decrease of 21% from the same period last year and 20% from the previous year; the net profit returned to its mother was 1.936 billion yuan, an increase of 105% over the same period last year and 21% from the previous year.
The production and sales of electrolytic aluminum increased significantly. From January to September, the company produced 12.46 million tons of metallurgical alumina, 2.83 million tons of fine alumina, 4.93 million tons of electrolytic aluminum, 4.94 million tons of sales, 9.69 million tons of coal production and 11.3 billion kWh of electricity for export; in the third quarter, the company produced 4.23 million tons of metallurgical alumina, 950,000 tons of fine alumina, 1.87 million tons of electrolytic aluminum, 1.88 million tons of sales and 3.47 million tons of coal. The production and sales of electrolytic aluminum increased greatly in the third quarter, with a month-on-month ratio of + 22% and + 27%, respectively.
The profit of electrolytic aluminum industry is expanding. The profit space of electrolytic aluminum showed an expansion trend in the third quarter. The average price of electrolytic aluminum in the third quarter was 18839 yuan / ton, with a month-on-month ratio of + 2%. In terms of raw materials, the price of pre-baked anodes dropped significantly, with an average price of 4953 yuan / ton in the third quarter, with a month-on-month ratio of-9%, aluminum fluoride-6%, and alumina an average price of 2881 yuan per ton. + 1%. The rise in aluminum prices superimposed the decline in the comprehensive cost of raw materials to expand the profits of the electrolytic aluminum plate.
Asset impairment drag gradually disappeared: the company's asset impairment loss in the third quarter was + 73 million yuan, which is the first time since the second quarter of 2019. The asset impairment loss in a single quarter turned negative to a positive increase in the company's profits.
The increase of shares held by the controlling shareholders shows confidence. Chinalco Group, the company's controlling shareholder, intends to increase its holding of A shares of the company by an amount of not less than 250 million yuan and no more than 500 million yuan. Chinalco's increased holdings reflect its confidence in the company's future development prospects and recognition of the company's long-term investment value, while enhancing investor confidence.
The qualitative change of electrolytic aluminum really begins: the supply end of electrolytic aluminum is faced with two bottlenecks for a long time-the shortage of power and the limitation of petroleum coke. 1) the contradiction of power supply of electrolytic aluminum in China does not lie in hydropower, but in the storage of new energy, and power supply may still face greater challenges; 2) what is more regrettable is that in the process of energy system reform and new energy construction, traditional energy has seriously reduced capital expenditure and competition for raw materials, which will eventually lead to a shortage of petroleum coke, another raw material for the production of electrolytic aluminum, which will have a more far-reaching impact on global electrolytic aluminum production in the medium and long term. On the demand side, in the context of domestic security buildings and counter-cyclical regulation, the drag on traditional demand will slow down. The demand for new energy (new energy vehicles, photovoltaic, etc.) will lead to a rebound in the demand for electrolytic aluminum, and the overall impact is emerging, with a demand growth rate of about 2-3%. To sum up, we maintain the judgment that the chain scene of the electrolytic aluminum industry may spiral up, and with the reshaping of the price, the attribute of "similar resources" in the electrolytic aluminum industry will also be recognized again.
Profit forecast and investment advice: we assume that the aluminum price for 2023, 2024, and 2025 is 185,000,000 yuan / ton, and it is estimated that the company's net profit for 2023, 2024, and 2025 is respectively 83, 121, 161, 000, 000
Risk hints: commodity prices fluctuate, project construction falls short of expectations, the solution of peer competition is not as expected, and the public data used in the research report are not updated in a timely manner.