occurrences
The company released its 2023 annual report. The company achieved operating income of 225.071 billion yuan, a year-on-year decrease of 22.65%; net profit to mother of 6.717 billion yuan, an increase of 60.23%; net profit after deducting non-return to mother of 6.614 billion yuan, an increase of 111.27% year-on-year.
reviews
Results were in line with expectations, and asset impairment affected Q4 results. 2023Q4 achieved operating income of 49.553 billion yuan, a year-on-month decrease of 32.53% and a year-on-year decrease of 56.82%; realized net profit of 1,364 billion yuan, a year-on-month decrease of 29.51%, and a loss of 375 million yuan in the same period last year; and realized net profit deducted from non-mother of 1,685 billion yuan, a decrease of 17.65% month-on-month. The company lost 755 million yuan in asset impairment in 2023, mainly due to a year-on-year decrease in depreciation of backward production capacity assets due to industrial restructuring.
Production of bauxite and electrolytic aluminum remained flat, and coal production increased dramatically. In 2023, the company produced 30.42 million tons of bauxite and 16.67 million tons of metallurgical grade alumina, a year-on-year decrease of 5.50%, and 6.79 million tons of raw aluminum (including alloys), a year-on-year decrease of 1.31%. Annual commercial coal production was 13.05 million tons, an increase of 21.51 percent over the previous year, the highest in history. China's alumina market is forecast to maintain a tight balance in 2024, and the prices of electrolytic aluminum and alumina are expected to remain high.
Resource security has been improved, and industrial development has been upgraded at an accelerated pace. In 2023, 21 million tons of domestic bauxite resources were added; in addition, Ningxia Energy obtained 271 million tons of additional coal resources. The company accelerated industrial restructuring and actively promoted key projects such as Guangxi Huasheng Phase II's 2 million ton alumina project, Inner Mongolia Huayun's 420,000 ton light alloy material project, Qinghai branch's 500,000 ton electrolytic aluminum project, and Baotou Aluminum Damaoqi's 1200MW source network load storage project; Ningdong's 250MW photovoltaic was fully connected to the grid, and affiliated companies added 303MW of distributed photovoltaics; the company made breakthroughs in the high-purity aluminum and “small metal” industry, and the scale of gallium metal production capacity rose to the top in the world.
The three-year plan for the recycled aluminum industry was implemented, and the project was gradually implemented. The Guizhou branch completed and put into operation a demonstration line with an annual output of 50,000 tons of recycled aluminum. Baotou Aluminum approved the 60,000 ton recycled aluminum project and consumed 192 thousand tons of scrap aluminum in the first half of the year. Solid waste disposal and utilization has been accelerated, and the comprehensive utilization rate of red clay has reached 14.85%, the highest level in history; new progress has been made in the disposal and comprehensive utilization of “three wastes” of electrolytic aluminum, and Wenshan Aluminum, Shanxi New Materials, and Yunlu Runxin Aluminum Electrolytic “Three Waste” disposal demonstration lines have been built, with an annual disposal capacity of 100,000 tons.
Profit forecasting
The company's net profit for 2024-2026 is estimated to be 86.78/97.17/10.702 billion yuan, EPS is 0.51/0.57/0.62 yuan, and the corresponding PE is 14.30/12.77/11.59 times, respectively. Maintain a “buy” rating.
Risk warning:
The price of electrolytic aluminum fluctuates greatly; the price of alumina fluctuates greatly; the cost of raw materials rises; downstream demand falls short of expectations; macroeconomic fluctuations.