Core views:
In 24Q1, the company's net profit to mother increased 63% month-on-month, which was better than expected. According to the company's financial report, 24Q1 achieved operating income of 49 billion yuan, -26% year-on-year, +34% month-on-month, net profit of 2.2 billion yuan, 23% year-on-month, +63% month-on-month, basic earnings per share of 0.13 yuan/share, +23% year-on-month, 63% month-on-month, net operating cash flow of 3.6 billion yuan, -9% year-on-year, -46% month-on-month, and a balance ratio of 51.61%, compared with -1.69 PCT at the end of 23. The main reason for the month-on-month improvement in 24Q1 performance was: 1. Management expenses decreased by 496 million yuan month-on-month. 2. Asset impairment decreased by 576 million yuan month-on-month.
Raw aluminum sector: 24Q1 aluminum prices rose slightly month-on-month, and costs rose. The Yunnan electrolytic aluminum production reduction policy caused the company's production to drop slightly month-on-month, and it is estimated that the profit of the electrolytic aluminum sector declined month-on-month. According to the company's financial report and Wind, the company's raw aluminum production in 24Q1 was -4% month-on-month to 1.78 million tons; the average price of SHEF aluminum rose 1% to 19055 yuan/ton. Mysteel estimates that the average total cost of electrolytic aluminum in China rose 3%, and the gross profit of an estimated ton of electrolytic aluminum decreased by 367 yuan/ton.
Alumina sector: The average price of alumina rose month-on-month in 24Q1. The company's alumina production increased month-on-month, and it is estimated that the gross profit of alumina increased. According to the company's financial report, Wind, the total output of 24Q1's metallurgical alumina, fine alumina, and both increased 107%, -54%, and 24% to 425, 99, and 5.24 million tons; the average price of alumina nationwide was 3,375 yuan/ton, up 6% month-on-month, and the average price of bauxite in Guinea rose 3% month-on-month to 71 US dollars/ton. Mysteel estimates the domestic aluminum oxide cost is 2,783 yuan/ton, or 0.4% month-on-month.
Profit forecasting and investment advice. The company's 24-26 EPS is expected to be 0.55/0.58/0.64 yuan/share, respectively. Based on comparable company valuations and the company's leading position, Yunlu's increased production performance, giving the company 20 times PE in 24 years. The reasonable value of A shares is 11.04 yuan/share. According to the current AH share premium ratio, the reasonable value of H shares is HK$7.86 per share, maintaining the “buy” rating of AH shares.
Risk warning. The macroeconomic economy fluctuated greatly, the price of electrolytic aluminum fell, the price of alumina fell, the price of electricity rose, and the production of alumina and electrolytic aluminum fell short of expectations.