Core views:
In 24Q1, the company's net profit to mother increased 27% month-on-month, in line with expectations. According to the company's financial report, 24Q1 achieved operating income of 6.8 billion yuan, +3% month-on-month net profit, +27% month-on-month, basic earnings per share of 0.15 yuan/share, +27% month-on-month, net operating cash flow of 1.1 billion yuan, -36% month-on-month, and a balance ratio of 56.38%, compared to -1.39 PCT at the end of 23. The main reason is that the increase in aluminum prices and alumina prices in 24Q1 brought about an increase of 194 million yuan in revenue and a decrease of 65 million yuan in costs.
The price of aluminum and alumina rose month-on-month in 24Q1, while the cost of electrolytic aluminum and alumina rose slightly and stabilized, respectively. Benefiting from the high self-sufficiency rate of alumina, the overall aluminum business cost remained stable. According to Wind, 24Q1, the average price of SHFE aluminum rose 1% month-on-month to 19055 yuan/ton, the average price of alumina rose 6% month-on-month, the average price of anode in northwest China fell 6% month-on-month, and the average price of thermal coal in Hami remained flat. The estimated gross profit of a ton of electrolytic aluminum was -85 yuan/ton month-on-month, while the price of bauxite in Guangxi remained flat month-on-month. It is estimated that the gross profit per ton of alumina was +183 yuan/ton.
Profit forecasting and investment advice. The company's 2024-2026 EPS is expected to be 0.72/0.74/0.76 yuan/share. Considering that the company has a stable low cost advantage, improved resource guarantee capacity, and the gradual release of aluminum foil for energy batteries, the company is given 15 times PE in 2024, with a corresponding reasonable value of 10.78 yuan/share, giving it a “buy” rating.
Risk warning. The macroeconomy fluctuated greatly, and aluminum prices fell sharply; costs such as coal prices and bauxite prices rose sharply; certification and production of new battery aluminum foil projects fell short of expectations.