occurrences
On April 25, the company released its quarterly report for the year 24. In 1Q24, it achieved revenue of 48.956 billion yuan, +33.52% month-on-month, -26.14%; net profit to mother of 2,230 billion yuan, +63.45% month-on-month, +23.01% year-on-year; net profit after deduction of 2.283 billion yuan, +29.57% month-on-month and +35.61% year-on-year.
Q1 Net profit to mother rose sharply from month to month. The average price of non-ferrous aluminum in the Yangtze River in 1Q24 was 1.9 million yuan/ton, +0.42% month-on-month, the average price of alumina in Henan was 3,422 yuan/ton, +13.84% month-on-month, and the average price of pre-baked anodes was 3,726 yuan/ton, -6.23% month-on-month. (1) Q1's metallurgical grade alumina output was 4.25 million tons, +0.95% month-on-month, 990,000 tons of fine alumina, -54.17% month-on-month, export 1.5 million tons of self-produced alumina, -0.66% month-on-month, 1.78 million tons of raw aluminum, -4.30% month-on-month, and 1.76 million tons of self-produced raw aluminum, -5.38% month-on-month. (2) Q1 Company's coal output was 2.88 million tons, -14.29% month-on-month, and outsourced power plant sales volume was 4.1 billion kWh, -16.33%. Q1 saw a month-on-month decline in alumina and aluminum electrolytic sales, but benefiting from rising product prices, revenue was +33.52% month-on-month to $41,444 billion, gross profit -2.26% to 7.512 billion yuan, net profit to mother +63.45% month-on-month to 2,230 billion yuan, and ROE increased 1.34 percentage points to 3.62% month-on-month.
The capital structure was optimized, and the period expense ratio was significantly reduced. At the end of March '24, the company's balance ratio was 51.61%, down 1.69 percentage points from the end of '23. The Q1 financial expenses ratio decreased 0.58 percentage points to 1.42%, the sales expenses ratio decreased 0.1 percentage points to 0.19%, and the management expenses ratio decreased 2.04 percentage points to 2.05% month-on-month. Continued optimization of cost management improved the company's profitability.
The amount of electrolytic aluminum is expected to rise sharply during the peak season. Yunlu Co., Ltd., a subsidiary of the company, resumed production in March '24. As of April 25, production capacity of 200,000 tons of electrolytic aluminum had resumed, with the remaining 410,000 tons to resume production; the first 420,000 ton light alloy project in Huayun, Inner Mongolia is expected to be electrified in May. April entered the peak consumption season for electrolytic aluminum, and the industry's profit per ton of aluminum continued to expand. It is expected that the resumption of production of Yunlu Co., Ltd. and the commissioning of Huayun Phase III will increase the company's electrolytic aluminum production and sales scale, and the peak season is expected to usher in a sharp rise in volume profit. The procedures relating to the transfer of 100,000 tons of electrolytic aluminum to the company by Yunlu Co., Ltd. have been completed, and the Qinghai branch's 500,000 ton electrolytic aluminum upgrade project is progressing in an orderly manner. Future completion and commissioning will further increase the company's electrolytic aluminum production capacity and maximize the scale effect.
The company's revenue for 24-26 is estimated to be 2435/2561/26.9 billion yuan respectively, with net profit attributable to mother of 10,397/122.54 billion yuan, EPS of 0.61/0.71/0.79 yuan respectively, and corresponding PE of 12.13/10.29/9.35 times, respectively. Maintain a “buy” rating.
Risk warning
Aluminum prices fell sharply; new production capacity fell short of expectations; production costs rose sharply.