投资要点:Incidents:
On October 27, Yunlu Co., Ltd. released its report for the third quarter of 2024: in the first three quarters of 2024, the company achieved operating income of 39.19 billion yuan, +32% year-on-year; net profit to mother of 3.82 billion yuan, +52% year-on-year; net profit after deducting 3.68 billion yuan, or +49% year-on-year.
On a quarterly basis, in the third quarter of 2024, the company achieved operating income of 14.54 billion yuan, +9% month-on-month, +20%; net profit to mother of 1.3 billion yuan, -4% month-on-month, +31% year-on-year; net profit of 1.29 billion yuan after deduction, -4% month-on-month and +32% year-on-year.
Investment highlights:
The month-on-month decline in the company's Q3 performance was mainly due to falling aluminum prices and rising alumina prices, while the increase in raw aluminum production contributed to a certain increase in performance.
Production and marketing: Q3 Electrolytic aluminum production increased further. In the first three quarters of 2024, the company achieved raw aluminum production of 2.148 million tons, +26.32%; alumina production of 1.073 million tons, -2.5%; production of aluminum alloy and processed aluminum products, 0.91 million tons, -0.1% year over year; and production of carbon products 0.6 million tons, +3.1% year over year. In the third quarter of a single quarter, the company achieved 0.797 million tons of raw aluminum, +11.7% month-on-month; 0.35 million tons of alumina, -2.0%; aluminum alloy and aluminum processing products, 0.322 million tons, +4.2% month-on-month; and 0.201 million tons of carbon products, +1.0% month-on-month. Q3 Raw aluminum production increased significantly from month to month, and there was a certain increase in performance.
Price: Falling aluminum prices and rising alumina prices affect performance. The average price of 2024Q3 Changjiang A00 aluminum and the average price of alumina in Guangxi was -4.7% and +6.9%, respectively. As aluminum prices fell, alumina prices rose, which had an impact on performance. Q4 aluminum prices and alumina prices both rose month-on-month. As of October 28, the average price of Changjiang A00 aluminum and the average price of alumina in Guangxi rose 1,169 yuan/ton and 506 yuan/ton, respectively.
Profit forecast and valuation: The estimated revenue for 2024-2026 is 49.3/52.2/54.7 billion yuan, respectively, and net profit to mother is 4.907/5.531/6.16 billion yuan, respectively, +24%/+13%/+11%; EPS is 1.42/1.60/1.78 yuan, corresponding to the current stock price PE of 10.47/9.29/8.34 times, taking into account the significant increase in the company's output. The long-term advantages of Green Electric Aluminum are outstanding, maintaining the “buy” rating.
Risk warning: (1) the risk of large fluctuations in aluminum prices; (2) the risk of a sharp rise in alumina and electricity costs; (3) the risk of production recovery falling short of expectations; (4) the risk of production restrictions and discontinuation; (5) the risk of data or data used in research reports not being updated in a timely manner.
