The company's revenue for the first three quarters of 2024 was -7.8% YoY, and net profit to mother +68.5% YoY. The company achieved revenue of 173.778 billion yuan in Q1-Q3 in 2024, down 7.76% year on year; realized net profit to mother of 9.017 billion yuan, +68.46% year over year; realized net profit deducted from non-mother of 8.716 billion yuan, +76.81% year over year. Looking at the third quarter of a single quarter, the company achieved revenue of 63.06 billion yuan, +16.04% year over month, and realized net profit of 2 billion yuan to mother, +3.34% year over year, and -58.21% month on month. The decline in the company's cumulative revenue in the first three quarters was mainly due to a reduction in the volume of the low-margin trade business and an improvement in trade quality; the increase in cumulative profit was mainly due to a year-on-year increase in commodity prices.

Profitability was adjusted month-on-month, and the balance ratio continued to be optimized. In Q1-Q3 2024, the company's gross margin was 15.23%, up 5.70pct year on year; net margin was 8.65%, up 4.48pct year on year. Looking at the third quarter of a single quarter, the company's gross margin was 11.67%, down 4.11 pct year on year and 7.11 pct month on month; net margin was 5.93%, down 0.73 pct year on year, down 5.80 pct month on month. 2024Q3, the company's profit margin declined significantly month-on-month, but revenue did not decline month-on-month but increased slightly. This is a decline in profitability due to increased costs. China Alcoa New Materials 2024Q3, a subsidiary that is mainly engaged in the alumina business, had a net profit of 0.695 billion yuan, and China Aluminum held 100% of its shares; Yunlu's 2024Q3 net profit was 1.301 billion yuan, and China Aluminum held 29.1% of its shares. The total net profit of these two subsidiaries to the mother of China Aluminum was about 1.07 billion yuan. The increase in the costs of the remaining subsidiaries led to a decline in the company's sales profit margin.

The company's production of electrolytic aluminum and alumina both increased month-on-month in the third quarter. In the first three quarters of 2024, the company achieved metallurgical alumina output of 12.57 million tons, +0.88%; fine alumina output of 3.25 million tons, +14.84%; export sales of self-produced metallurgical alumina 4.77 million tons, -4.79%; raw aluminum production of 5.62 million tons, +14.00%; export sales of self-produced raw aluminum, 5.6 million tons, +13.36% year on year; coal production 9.74 million tons, year on year + 0.52% Looking at the third quarter of the single quarter, the company achieved metallurgical grade alumina production of 4.37 million tons, +3.3% month-on-month; fine alumina production of 1.18 million tons, +24.2% year-on-year, +9.3% month-on-month; self-produced metallurgical alumina export sales of 1.58 million tons, which remained flat year-on-year, -6.5% month-on-month; raw aluminum production was 1.99 million tons, +7.6% month-on-month; export sales of self-produced alumina 2.01 million tons, +6.9% , +9.8% month-on-month; coal production was 3.36 million tons, -3.2% year-on-year, -4.0% month-on-month.

Risk warning: Prices of electrolytic aluminum and alumina fluctuate; rising raw material prices reduce the profitability of electrolytic aluminum.

Investment advice: Lower profit forecasts and maintain the “better than the market” rating. The company's 2024-2026 revenue is expected to be 203.503/204.02/204.732 billion yuan, year-on-year growth rate -9.58%/+0.25%/+0.35%; net profit to mother is 11.803/13.795/15.513 billion yuan, year-on-year growth rate +75.71%/+16.88%/+12.45%; diluted EPS is 0.69/0.80/0.90 yuan, corresponding PE to the current stock price is 11.2/9.6/ 8.5x Considering that the company is a leading large non-ferrous central enterprise, it still has a certain capacity to expand production even when there is a ceiling on production capacity in the electrolytic aluminum industry, maintaining a “superior to the market” rating.