On January 26, the company announced a pre-increase in its 2023 results. It is expected to achieve net profit of 63-73 billion yuan in 2023, an increase of 21-3.1 billion yuan over the previous year, and an increase of 50%-74% over the previous year. It is estimated that net profit not attributable to mother will be 6.6-7.6 billion yuan in 2023, an increase of 35-45 billion yuan over the previous year, and an increase of 113%-145% over the previous year.
Actively arrange production and operation to achieve a significant increase in performance. In 2023, the average spot price of non-ferrous aluminum in the Yangtze River was 18,700 yuan/ton, the average price of Q4 was 1.90 million yuan/ton, +0.71% month-on-month; in '23, the average price of alumina in Henan was 2963.09 yuan/ton, -1.53%; the average price of Q4 was 3009.43 yuan/ton, +3.17% month-on-month; in '23, the average price of pre-baked anodes was 5530.92 yuan/ton, -3.11%; Average electricity cost for aluminum 0.443 yuan/degree, -1.04% YoY, Q4 average price 0.4329 yuan/degree, +0.93% month-on-month. Prices of alumina and raw aluminum, the main products declined year on year in 2023. Facing the price fluctuations of major products in 2023 and the impact of the suspension of electrolytic aluminum production in Yunnan and Guizhou, the company strengthened production plans and process control, improved effective capacity utilization, and achieved a 50%-74% year-on-year increase in net profit to mother, and the performance growth was in line with expectations.
It is proposed to establish a joint venture with Chinalco High-end Manufacturing to promote the green transformation of the aluminum industry. The company plans to establish a joint venture with China Alcoa Advanced Manufacturing (Yunnan) Co., Ltd., a holding subsidiary of the controlling shareholder, China Alcoa Green Advanced Aluminum-based Materials (Yunnan) Co., Ltd. in cash. The company plans to invest RMB 288 million to hold 60% of the shares in the joint venture. After the establishment of the joint venture, China Alcoa Premium Manufacturing plans to invest 192 million yuan to hold 40% of the joint venture. Yunlu Co., Ltd., a subsidiary of the company, has 3.5 million tons of electrolytic aluminum production capacity in Yunnan. The joint venture plans to lay out and invest in a flat ingot production line to rationally plan the downstream use of the company's green aluminum to form a low-carbon high-end material with a clear carbon footprint and competitiveness, which will effectively promote the green transformation of the company's aluminum industry, give full play to the advantages of green aluminum, and enhance brand competitiveness and profitability.
We promise to resolve competition in the industry and create long-term growth drivers. The company promised to resolve peer competition with Yunlu Co., Ltd. by December 31, 2028. It is expected that specific solutions to interbank competition will create a deep impetus for the company's long-term development.
The company's revenue for 23-25 is estimated to be 2768/2848/289.9 billion yuan, with net profit attributable to mother of 70.13/82.11/9.459 billion yuan respectively, EPS of 0.41/0.48/0.55 yuan respectively, and corresponding PE of 14.02/11.98/10.40 times, respectively, maintaining a “buy” rating.
Product prices have dropped sharply; electricity production of electrolytic aluminum has been limited; production costs have risen sharply.