On March 27, the company released its annual report for the year 23, achieving revenue of 225.071 billion yuan, -22.65% year on year; net profit to mother of 6.717 billion yuan, +60.23% year over year; net profit after deducting non-return to mother of 6.614 billion yuan, +111.27% year over year. 4Q23 revenue was 49.553 billion yuan, -0.10% month-on-month; net profit to mother was 1,364 billion yuan, -29.51% month-on-month; net profit without return to mother was 1,685 billion yuan, -17.65% month-on-month.
2H23 achieved significant growth in performance in major sectors. (1) Overseas sales of self-produced alumina were 6.52 million tons in 23 years, +24.67% year-on-year, and Q4 export sales volume was 1.51 million tons, -4.43% month-on-month. The average price of 2H23 alumina was +1.79% month-on-month to 2944.31 yuan/ton, and the alumina sector's revenue was 31,999 billion yuan, +48.65% month-on-month. The annual profit of the alumina sector was 985 million yuan before tax, an increase of 773 million yuan over the same period last year, mainly due to a decrease in asset impairment items. In '23, the company's alumina manufacturing cost was 2203 yuan/ton, +5.05% over the same period last year. (2) The export sales volume of self-produced primary aluminum (including alloy) in 23 years was 6.8 million tons, -0.15% year over year, and Q4 export sales volume was 1.86 million tons, -1.06% month on month. The revenue of the 2H23 raw aluminum sector was 68.719 billion yuan, +21.43% month-on-month, mainly due to the export sales volume of self-produced primary aluminum (including alloys) +22.22% to 3.74 million tons, the average price of non-ferrous aluminum in the Yangtze River was +2.19% month-on-month to 18,900 yuan/ton during the same period, and the profit of the 2H23 raw aluminum sector before tax was 7.301 billion yuan, +85.21% month-on-month. The company's raw aluminum manufacturing cost was 16,000 yuan/ton in '23, -9.14% compared with the same period last year, and profitability increased dramatically. (3) 4Q23 coal production was 3.36 million tons, -3.17% month-on-month, and the power generation capacity of outsourced power plants during the same period was 4.9 billion kWh, +28.95% month-on-month. The 2H23 energy sector had revenue of 4.432 billion yuan, -8.13% month-on-month, and profit before tax of 797 million yuan, or -38.74% month-on-month.
Depreciation has been drastically reduced, and asset quality has been consolidated. In '23, the company's asset impairment losses fell sharply by 84.54% year-on-year to 755 million yuan, including net impairment losses of inventory assets of 0.08 billion yuan, a net return of 146 million yuan in bad debt provisions, and 598 million yuan in long-term asset impairment reserves, mainly providing 450 million yuan for depreciation of China Alcoa's Zhongzhou bauxite mine assets. After continuous asset depreciation in previous years, the quality of the company's assets has been consolidated. Benefiting from reduced asset depreciation and reduced pressure on pre-tax profits, the company achieved the best net profit to the mother in '23 since '08.
Key projects are about to be put into operation. The Inner Mongolia Huayun Phase III 420,000 ton light alloy material project is expected to be electrified for the first time in May '24, and the Guangxi Huasheng Phase II 2 million tonne alumina project is expected to be put into operation in early '25. After the above projects are put into operation, they will further increase the company's alumina and raw aluminum production and sales, and increase the company's profits.
Pay attention to shareholder returns and increase the dividend ratio. The company plans to distribute cash dividends to shareholders at RMB 0.8 (tax included) for every 10 shares. The total dividend payout was RMB 1,373 million, an increase of 122% over the previous year, accounting for 20.44% of the company's net profit to the mother in '23, and the dividend ratio increased by 5.7 percentage points compared to '22.
The company's revenue for 24-26 is estimated to be 2337/2457/25.4 billion yuan respectively, with net profit attributable to mother of 74.49/103.17/12.457 billion yuan respectively, EPS of 0.43/0.60/0.73 yuan, respectively, and corresponding PE 16.36/11.81/9.78 times, respectively. Maintain a “buy” rating.
Product prices have dropped sharply; electricity production of electrolytic aluminum has been limited; production costs have risen sharply.