Pre-baked anodes: Concentration is still increasing, the company's strong alpha attributes are evident, and its leading position is becoming more and more stable. As a supporting industry for the aluminum industry, the development of the pre-baked anode industry is inseparable from the progress of electrolytic aluminum technology and the development of the aluminum industry. Trends in the development of the pre-baked anode industry: 1) High-end, continuous progress in raw aluminum production technology will place higher demands on the quality of pre-baked anodes, including the continuous increase in current capacity, the continuous increase in the size of the pre-baked anode, the continuous increase in current density, and the continuous improvement of pre-baked anode quality. 2) Large-scale, China is the main production base for pre-baked anodes in the world, and the concentration of the industry will increase rapidly.
3) Specialization. The business model gradually changed from supporting electrolytic aluminum plants to an independent commercial pre-baked anode production model. Raw materials: Heavy materials for the production of pre-baked anodes. Among them, petroleum coke and coal asphalt account for about 80% of the cost, especially petroleum coke. In recent years, the supply and demand situation has become increasingly tight, and prices have continued to rise, making it the most important raw material. As the largest buyer of petroleum coke in China, the company's annual petroleum coke procurement volume reaches 3 million tons (the company's annual petroleum coke procurement volume is expected to exceed 5.5 million tons in the future). The procurement volume accounts for about 11% of the industry's total output, accounting for about 11% of the industry's total output, and has a significant scale advantage. Competition pattern and profitability: 1) The company's market share in commercial pre-baked anodes is 20% (the market share is expected to exceed 40% by 2025), and the competitive landscape of the industry is unique. 2) Large foreign electrolytic aluminum manufacturers have higher requirements for pre-baked anodes, so the gross margin of the export business is higher. The company's pre-baked anode exports account for more than 30% of total exports, and its market share is outstanding. 3) Production scale and raw material procurement advantages show the company's α, and profitability exceeds the industry average.
Q3 performance significantly exceeded market expectations. Q4 can be expected after the price of pre-baked anodes stabilizes. According to the three-quarter report, the cumulative revenue for the first three quarters of 2023 was 11.930 billion yuan, up -12.98% year on year; net profit was -332 million yuan, up -134.40% year on year; net profit after deduction was -331 million yuan, up -134.51% year on year.
Among them, Q3 achieved revenue of 3.8 billion yuan in a single quarter, a year-on-year increase of -33.87%; net profit of 77 million yuan, a year-on-year increase of -80.66%; net profit after deduction was 80 million yuan, a year-on-year increase of -79.54%; gross sales margin in a single quarter was 9.79% and net interest rate was 2.87%. The company's profit exceeded market expectations in a situation where the impairment of raw materials was completed and product prices stabilized, and we expect further improvement in Q4's performance.
Profit forecast: We expect the company's 2023-2025 EPS to be 0.01, 1.42, and 2.56 yuan, respectively, and PE of 1714, 12, and 7 times, respectively, covering the first time, giving it a “buy” rating.
Risk warning: pre-baked anodes, anode materials, overseas business, sales volume falling short of expectations, rising costs, etc.