Event
On October 24, the company released its third-quarter 2022 report that its 2022 Q1-Q3 homing net profit increased by 112.25% compared with the same period last year.
Comment
The net profit of Q1-Q3 homing in 2022 increased by 112% compared with the same period last year. In 2022, the company's Q1-Q3 realized operating income of about 5.952 billion yuan, down about 3.6% from the same period last year, and realized a net profit of 1.253 billion yuan, an increase of about 112.25% over the same period last year. In 2022, the company's Q3 realized operating income of about 1.719 billion yuan, down about 21.16% from the same period last year, and realized a net profit of 465 million yuan, an increase of about 73.47% over the same period last year. The main reasons for the increase in 2022Q1-Q3 net profit include the increase in net profit of Xinjiang Tianchi Energy Co., Ltd., a shareholding company, and the rise in the price of new aluminum electronic materials and aluminum products.
Issue convertible bonds to further expand production capacity. The company publicly issued convertible bonds on September 29, 2022, and intends to raise no more than 1.38 billion yuan. The funds raised are intended for high-performance and high-purity aluminum clean production projects, energy-saving and carbon-reducing circular economy aluminum-based new materials industrialization projects, green high-purity and high-precision electronic new materials projects and high-performance high-voltage electronic new materials projects.
The downstream application field is broad, the demand is good. In 2020, household appliances, lighting and computer equipment accounted for 24%, 14% and 13% of the global aluminum electrolytic capacitor market, respectively. In terms of new energy vehicles, in August 2022, the national production and sales of new energy vehicles were 691000 and 666000 respectively, an increase of 123.6% and 107.5% over the same period last year. As of August 2022, the total number of charging piles in the country was 1.623 million, an increase of 64.8 percent over the same period last year. In terms of wind power and photovoltaic, by August 2022, the installed capacity of wind power nationwide had increased by 16.14 million kilowatts, an increase of 10.3 percent over the same period last year, and the installed capacity of photovoltaic had increased by 44.47 million kilowatts, an increase of 101.7 percent over the same period last year. In terms of home appliances, in August 2022, the production of air conditioners increased by 6.1% compared with the same period last year, household washing machines increased by 2.5%, and color TV production increased by 16.5% compared with the same period last year.
Investment suggestion
Downstream areas of high prosperity, the company's future performance will continue to volume. We estimate that the net profit of 2022 and 2023 in 2024 will be 1.107 million and 1.607 billion respectively, and the corresponding EPS will be 0.82 and 0.98 respectively. With the closing price of 8.32 yuan on October 24, 2022 as the benchmark, the corresponding PE is 10.12, 8.52 and 6.97 times, respectively. Combined with the prosperity of the industry, optimistic about the development of the company, maintain the "highly recommended" rating.
Risk hint
The environmental protection policy is stricter, the downstream demand is lower than expected, and the progress and profit of investment expansion projects are not as expected.