Incidents. The company released its three-quarter report for 2024. In the first three quarters of 2024, the company achieved operating income of 39.18 billion yuan, an increase of about 31.67% over the previous year; net profit to mother was 3.82 billion yuan, an increase of about 52.49% over the previous year. Net profit to mother was 1.3 billion yuan in a single quarter in the third quarter of 2024, +31.42% year-on-year.

Seizing the opportunity to quickly resume production, the company's electrolytic aluminum production increased. In terms of output, from January to September 2024, the company focused on improving the production process, completing the technical transformation of two electrolysis production lines, and increasing production in an orderly manner. At the same time, with the improvement of the power supply situation in Yunnan Province, the company quickly resumed production, capacity utilization increased dramatically, and the electrolyzer operated efficiently and stably, achieving 2.148 million tons of raw aluminum production, an increase of 26.32%; produced 1.0732 million tons of alumina, a year-on-year increase of 2.49%; produced 0.5986 million tons of carbon products, an increase of 3.06 million tons over the previous year %; Production of aluminum alloy and aluminum processing products was 0.91 million tons, a year-on-year decrease of 0.12%.

Guarantee the supply of resources and increase the company's profits with the bauxite layout. Alumina prices have recently risen sharply. Wind data shows that the average domestic alumina price in the third quarter of 2024 was 3,844.97 yuan/ton, up about 25.3% year on year and 5.8% month on month. Against the backdrop of continued high domestic alumina prices, the company has taken many measures and made key breakthroughs to vigorously promote the acquisition and supply of resources and energy, and increase the company's profits. The first is to actively participate in resource exploration within Yunnan Province, formulate action plans to obtain bauxite resources in surrounding regions, and accelerate the acquisition of bauxite resources in and around Yunnan Province. The second is to speed up the processing of procedures such as bauxite exploration and transfer around Wenshan, complete the continuation of resources, and guarantee the amount of preparation for mining. The third is to actively communicate with power management departments to ensure electricity supply, and at the same time strive to maximize the use of green energy and control electricity costs. The fourth is joint ventures with professional power companies to enhance energy security and supply capabilities through joint investment or self-acquisition.

The profit margin of electrolytic aluminum is expected to increase, and pay attention to changes in the company's profit. Alumina prices are currently high, but it is expected that a number of projects will be put into operation in 2025, which may put pressure on alumina prices at that time. At the same time, domestic stimulus policies are expected to be gradually introduced. The profit margin of electrolytic aluminum is expected to increase in 2025, so we can pay attention to the profit performance of aluminum companies.

Investment advice. The company's performance is good, and the production scale continues to increase. As the price of electrolytic aluminum rises, the company's profit forecast was raised, and the company's net profit for 2024-2026 is expected to be 4.944, 5.669, and 5.966 billion yuan, respectively.

Maintain a “buy” rating.

Risk warning: Product production falls short of expectations, product prices fluctuate greatly, and overseas policies change drastically.