occurrences
On April 19, the company disclosed its quarterly report for the year 24, with 1Q24 revenue of 6.825 billion yuan, +2.92% month-on-month, -1.71% year-on-year; net profit to mother of 720 million yuan, +26.70% month-on-month and +43.55% year-on-year; net profit without return to mother of 706 million yuan, +27.42% month-on-month and +125.14% year-on-year.
reviews
Increased profits in tons of aluminum led to an increase in Q1 results. The average price of non-ferrous aluminum in the Yangtze River in 1Q24 was 191,000 yuan/ton, +0.46% month-on-month, while the average price in the petroleum coke market was 1,733 yuan/ton, -1.37% month-on-month. The company has an integrated aluminum industry chain, and has achieved total self-sufficiency for the main raw materials, alumina and pre-baked anodes. The six generator sets can meet the electricity demand of about 80-90% of the aluminum ingot production. As the price of aluminum rose in 1Q24, the raw material cost fell +2.92% month-on-month to 6.825 billion yuan, and operating costs -1.16% month-on-month to 5.550 billion yuan, bringing gross profit +25.41% month-on-month to 1,275 billion yuan. The gross margin increased 3.36 percent month-on-month to 18.69%, and ROE increased 0.56 percentage points month-on-month to month-on-month 2.94%
The capital structure has been improved, and cost management has been continuously optimized. By the end of the first quarter of '24, the company's balance ratio was 56.38%, down 1.4 percentage points from 57.78% at the end of '23, the financial expense ratio of the 1Q23 company decreased by 0.12 percentage points to 2.70%, sales tax and additional/operating income decreased 0.4 percentage points to 1.55% over the same period, the sales expense ratio decreased by 0.02 percentage points to 0.07%, and the management expense ratio increased by 0.13 percentage points to 1.38%, and the R&D expense ratio decreased by 0.26 percentage points to 0.68%.
Integrated construction cost advantages, increased use of green electricity enhances product competitiveness. The company's high-purity aluminum is directly purified through the upstream raw material aluminum liquid to reduce energy consumption and production costs of deep-processing products, and has leading technical and cost advantages in the field of high-purity aluminum. Tianzu Investment acquired by the company is mainly responsible for operating the company's special railway line. The line was completed and opened to traffic in early '24. In the future, the railway will transport the raw materials and finished products required by the company, and the annual cargo transportation volume will reach about 10 million tons, saving logistics costs and further consolidating the cost advantage.
The company expects to consume about 35% of the total amount of electricity purchased from outside the company in 24. Research and build a green and low-carbon aluminum industry model. The six series electrolytic aluminum workshop uses entirely green renewable energy, and actively promotes relevant certifications and low-carbon certificates. It is expected to facilitate export sales of related products and enhance product competitiveness.
Profit Forecast & Investment Advice
The company's revenue for 24-26 is estimated to be 343/374/40.7 billion yuan, respectively, net profit to mother of 30.18/35.60/3.854 billion yuan, EPS 0.65/0.77/0.83 yuan, respectively, and corresponding PE 10.71/9.08/8.39 times, respectively. Maintain a “buy” rating.
Risk warning
Aluminum prices fluctuated; demand fell short of expectations; project construction fell short of expectations.