The company released its 2024 mid-year report

The first half of 2024 achieved operating income of 24.65 billion yuan, +39.49% year over year; realized net profit of 2.52 billion yuan, +66.26% year over year; realized net profit deducted from non-mother of 2.39 billion yuan, +60.19% year over year.

Among them, Q2 achieved operating income of 13.29 billion yuan, +17.02% month-on-month, net profit of 1.355 billion yuan, +16.46% month-on-month, after deducting non-attributable net profit of 1.353 billion yuan, or +30.72% month-on-month.

Electrolytic aluminum Q2 production increased month-on-month, and rising aluminum prices increased profits

? Price: According to Wind, the average price of 2024H1 Shanghai aluminum was 19856 yuan/ton, +1,390 yuan/ton (+7.5%); the average spot price of 2024H1 alumina was 3508 yuan/ton, +543 yuan/ton (+18.3%); the average price of 2024H1 pre-baked anodes was 4144 yuan/ton, -1463.5 yuan/ton (-26.1%) year on year. Among them, the average price of Shanghai Aluminum in 2024Q2 was 20,643 yuan/ton, +1,587 yuan/ton (+8.3%) month-on-month, and +2,273 yuan/ton (+12.4%) year-on-year. The average spot price of 2024Q2 alumina was 3,648 yuan/ton, +283 yuan/ton (+8.4%) month-on-month, and +708 yuan/ton (+24.1%) year-on-year. The average price of 2024Q2 pre-baked anodes was 4157 yuan/ton, +27 yuan (+0.7%) month-on-month and -764 yuan (-15.5%) year-on-year.

? Volume: 2024H1 produces 0.723 million tons of alumina, 0.3975 million tons of carbon products, 1.3507 million tons of raw aluminum, and 0.5877 million tons of aluminum alloy and processed aluminum products.

Among them, Q2 produced 0.3574 million tons of alumina, -2.24%; produced 0.1991 million tons of carbon products, +0.35%; produced 0.7138 million tons of raw aluminum, +12.07%; and produced 0.3092 million tons of aluminum alloy and processed aluminum products, +11.02% month-on-month.

? Profit: 2024H1 electrolytic aluminum products achieved gross profit of 2.135 billion yuan, +51.41% year on year, gross profit margin of 15.43%, year-on-year -2.94 pct; aluminum processing products achieved gross profit of 1.628 billion yuan, +25.71% year on year, gross profit margin of 15.61%, +2.10pct year on year.

The company's main production and operation goals remain unchanged

In 2024, the company's main production and operation targets are: alumina production of about 1.4 million tons (51.6% completed), production of electrolytic aluminum production of about 2.7 million tons (50% completed), production of aluminum alloy and processed products about 1.26 million tons (46.6% completed), and production of carbon products about 0.8 million tons (49.7% completed).

It is proposed to distribute mid-term dividends to give back to shareholders

The company's mid-term profit distribution plan for 2024, which was reviewed and approved by the 6th meeting of the 9th board of directors, is based on a total share capital of 3.468 billion shares. A cash dividend of 2.3 yuan (tax included) is distributed to all shareholders for every 10 shares, for a total cash dividend of 0.798 billion yuan. The company does not transfer capital from the capital reserve fund to increase share capital, and does not give bonus shares.

Investment advice:

We expect the company to achieve operating income of 49.735, 51.748, and 53.491 billion yuan respectively in 2024-2026, with net profit of 4.619, 5.704, and 5.802 billion yuan, corresponding EPS of 1.33, 1.64, and 1.67 yuan/share, respectively. Currently, the corresponding PE price is 9.0, 7.3, and 7.2 times. The company maintained a “buy-A” rating, and the target price for 6 months remained at 13.8 yuan/share, corresponding to about 10.4 times PE in 24 years.

Risk warning: Demand falls short of expectations, product prices fluctuate, limited voltage production exceeds expectations, environmental risks and project progress fall short of expectations.