occurrences
On April 25, the company released its quarterly report for the year 24. 1Q24 achieved revenue of 11.358 billion yuan, -12.01% YoY, +20.28% YoY; net profit to mother of 1,164 billion yuan, -19.79%, +31.53% YoY; net profit without return to mother of 1,035 million yuan, -28.92% month-on-month and +17.66% year-on-year.
reviews
Q1 The sales volume of electrolytic aluminum declined, and the transfer of the electrolytic aluminum index was completed. The average price of 1Q24 Changjiang non-ferrous aluminum 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. Based on the average unit consumption of the industry, the production cost of raw aluminum increased 687 yuan/ton. Q1 produces 365,600 tons of alumina, 198,400 tons of carbon, 636,900 tons of raw aluminum, and 278,500 tons of aluminum alloy and processed aluminum products. Calculating raw aluminum sales volume based on revenue and aluminum prices. According to our estimates, Q1's raw aluminum sales volume was about 600,000 tons, a decrease of 12.38% over 4Q23's 680,000 tons. Affected by the reduction in raw aluminum volume and profit, Q1's gross profit was -28.25% month-on-month to 1,629 billion yuan. The procedures relating to the transfer of 100,000 tons of electrolytic aluminum production capacity indicators to the controlling shareholder China Aluminum have been completed. The company received the full transfer price. Q1 asset disposal revenue increased sharply to 167 million yuan. Q1 net profit to mother was -19.79% month-on-month, and the decline was lower than the decline in gross profit.
The balance ratio is declining steadily, and expense management continues to be optimized. The company's balance ratio at the end of March '24 was 23.51%, down 2.09 percentage points from the end of '23, down 11.78 percentage points from the end of '22, and the capital structure was trendily optimized. Q1 The company's operating tax and additional/sales revenue was -0.06 percentage points to 0.69% month-on-month, sales expenses ratio -0.03 percentage points to 0.08% month-on-month, management expenses ratio -0.39 percentage points to 1.30% month-on-month, and financial expenses ratio +0.03 percentage points month-on-month to 0.12%. Overall expenses improved during the period, enhancing the company's profitability.
Production is gradually resumed due to limited production capacity, and the volume of electrolytic aluminum is expected to rise sharply during the peak season. The company's previous production capacity of 610,000 tons of electrolytic aluminum began to resume production in March '24. As of April 25, production had resumed 200,000 tons, and the remaining 410,000 tons are yet to be resumed. The company continues to strengthen communication with relevant departments, actively seek electricity consumption load, and speed up the resumption of electrolytic aluminum production. April entered the peak consumption season for electrolytic aluminum. The rise in aluminum prices encouraged the continuous expansion of the industry's profit per ton of aluminum. It is expected that as the company's resumption of production progresses, the peak season is expected to usher in a sharp rise in volume profit.
Profit forecasting & investment ratings
The company's revenue for 24-26 is estimated to be 493/505/51.7 billion yuan, with net profit attributable to mother of 43.05/52.38/6.223 billion yuan respectively, EPS of 1.24/1.51/1.79 yuan, respectively, and corresponding PE of 11.56/9.50/8.00 times, respectively. Maintain a “buy” rating.
Risk warning
Aluminum prices fluctuated greatly; electricity restrictions limited production; raw material prices rose.