The company publishes its 2021 semi-annual report. In the first half of 2021, the company achieved revenue of 3.951 billion yuan, an increase of 64.23% over the same period last year, a net profit of 426 million yuan, an increase of 322.78% over the same period last year, and a non-return net profit of 430 million yuan, an increase of 281.68% over the same period last year.
In a single quarter, 2021Q2 achieved revenue of 1.955 billion yuan, an increase of 75.0% over the same period last year, a decrease of 2.0% from the same period last year, a net profit of 224 million yuan from the same period last year, an increase of 330.6% from the same period last year, an increase of 10.4% from the previous quarter, and a net profit of 225 million yuan from non-return, an increase of 397.7% and 9.9% over the same period last year.
Both volume and price rose, and the company's net profit increased by 302 million yuan in the first half of 2021 compared with the same period last year, mainly due to a 388 million yuan year-on-year increase in gross profit. In the first half of 2021, the average price difference between broken aluminum and A00 increased by 641 yuan / ton to 3654 yuan / ton compared with the same period last year. Even if the product sales price increased (ADC12 average price increased by 3920 yuan / ton), the company's gross profit margin still increased to 19.53% compared with the same period last year. At the same time, the company has aluminum alloy production bases in Suzhou Taicang and Malaysia, and the scrap trade business covers most of the eastern part of the United States. In the first half of 2021, in the context of global economic recovery, the company's trade in aluminum alloy ingots and scrap may increase compared with the same period last year.
In a single quarter, the net profit of 2021Q2, the company's parent, increased by 21 million yuan to 224 million yuan compared with the previous quarter. The main reasons are management expenses (- 18 million yuan), financial expenses caused by exchange rate fluctuations (- 12 million yuan) and asset impairment losses (- 30 million yuan). In addition, 2021Q2's gross profit decreased by 29.44 million yuan from the previous month, and its gross profit margin dropped by 1.1pct to 19.0% from the previous month, which may be due to the narrowing of the price difference between aluminum alloy and waste aluminum (based on the price of Nantong non-ferrous crushed raw aluminum and ADC12, the price difference is-21 yuan / ton), and the price of aluminum alloy has increased from the previous month (based on the Nantong non-ferrous ADC12 price, the month-on-month ratio is + 1245 yuan / ton).
Core focus: the company's core advantage lies in the waste aluminum recycling system at home and abroad (the United States, China, South America, Europe, Australia, Japan, Southeast Asia and other countries and regions) and the aluminum alloy production base in Malaysia. Since the domestic control standard of waste non-ferrous metal entrainment was raised from 2% to 1% in 2018, the import of waste aluminum has gradually decreased. In addition, after the aluminum ash is adjusted to solid waste, the overseas waste aluminum supply system ensures the company's competitive advantage. In addition, the company's Malaysia plant is expected to continue to expand production. Under the background of carbon neutralization and carbon peak, waste aluminum has more advantages in resource saving, energy saving and emission reduction, and ESG requirements of the automotive industry chain.
Profit forecast: the global layout of the company's waste aluminum acquisition end, with the advantage of purchasing raw materials at a low price, with the improvement of waste aluminum recovery capacity, the company's capacity utilization of aluminum ingot production has a larger improvement space, and the price gap of refined waste aluminum is gradually expanding. open the profit space, the company is expected to usher in a simultaneous rise in volume and price. It is estimated that the net profit from 2021 to 2023 is 967 million yuan, 1.106 billion yuan and 1.219 billion yuan, and the corresponding EPS is 0.44,0.50,0.55 yuan respectively. The PE corresponding to the closing price on August 17 was 9.7x, 8.5x and 7.7x. Coverage for the first time, giving a "prudent overweight" rating.
Risk tips: downstream demand is lower than expected, policy risk, capacity utilization is not as expected, etc.
