On April 9, the company released its 2023 annual report. In 2023, the company achieved operating income of 28.975 billion yuan, -12.22%; realized net profit to mother of 2,205 billion yuan, -16.80% year over year; annual net operating cash flow was 3,916 billion yuan, up 24.1% year on year; and basic earnings per share was 0.48 yuan/share.
Comment:
Product production has been rising steadily, and full-year results are in line with expectations. In 2023, the company's electrolytic aluminum production reached 1.165 million tons, up 0.64% year on year; alumina output was 2.119 million tons, up 37.6% year on year; the company's self-generating units generated nearly 13.5 billion kilowatts; anode carbon output was 599,000 tons, up 16.9% year on year; high purity aluminum production was 43,000 tons, up 3.4% year on year; battery aluminum foil production was 10,000 tons.
The company's revenue declined slightly in 2023, mainly due to a 5% year-on-year drop in the sales price of aluminum ingots, a 28% year-on-year drop in sales of outsourced aluminum ingots, and a 58% year-on-year decline in high-purity aluminum sales; the year-on-year decline in net profit to mother was mainly due to the decline in the sales price of aluminum ingots exceeding the cost reduction, and some profits of anode carbon and high-purity aluminum have not yet been sold.
Consolidate the advantages of integrated development, and performance growth is worth looking forward to. The company has production links for the entire industry chain of bauxite, alumina, pre-baked anodes, power generation, electrolytic aluminum, high-purity aluminum, and aluminum deep processing. As the company's Guangxi bauxite and overseas bauxite projects promoted development and mining, the Jiangyin battery aluminum foil project was put into operation and production capacity gradually climbed, and the company's overall industrial chain layout advantages were further strengthened and improved. In 2023, the company continued to accelerate the downstream battery aluminum foil project. The Shihezi aluminum foil blank production line has a planned production capacity of 300,000 tons. Currently, production and commissioning of the first phase of 150,000 tons of main equipment has been completed, and large-scale production is about to begin; the aluminum foil deep processing production line in Jiangyin has now completed equipment installation and commissioning of 20,000 tons per year, and has entered the trial production stage, with a new production capacity of 200,000 tons. The products include aluminum foil for power batteries, aluminum foil for energy storage batteries, and aluminum foil for food.
Strengthen resource guarantee capabilities and further consolidate cost advantages. The company completed the share acquisition of a local Guinean mining company in 2023 and obtained exclusive purchase rights for its bauxite products, and obtained additional bauxite production capacity of about 6 million tons/year. Currently, the project has entered the production and mining stage and is about to be shipped domestically. On the Indonesian side, the company has signed an agreement to acquire 100% of PT Inti Tambang Makmur shares and obtained three bauxite mining rights. The next step is to invest in the construction of a 2 million ton alumina project in Indonesia. Currently, the first phase of construction of 1 million tons is progressing at an accelerated pace. With the implementation of projects in Guinea and Indonesia, the company's bauxite resource guarantee capacity continued to increase, and its cost advantage was further consolidated.
Investment advice: The advantages of the integrated layout of the company's industrial chain are remarkable, and the resource guarantee capacity continues to be strengthened, which can better withstand the risk of industry fluctuations and provide a strong guarantee for future performance growth. The company's earnings per share for 2024-2025 are expected to be 0.75 yuan and 0.89 yuan, respectively, and PE corresponding to the closing price on April 10 is 10.05 and 8.48 times, respectively, maintaining the company's purchase rating.
Risk warning: macroeconomic fluctuation risk; environmental protection and production safety risk; raw material price fluctuation risk; industry competition risk; risk of downstream demand falling short of expectations; foreign trade export risk.