\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 677 Henan Mingtai Al.Industrial Co.Ltd(601677) )
Event: the company released its annual report for 2021 after hours on March 18. In 2021, it achieved a revenue of 24.6 billion yuan, a year-on-year increase of 51%; The net profit attributable to the parent company was 1.852 billion yuan, a year-on-year increase of 73%; The net profit attributable to the parent company after deduction was 1.59 billion yuan, a year-on-year increase of 97%.
Comments:
The annual performance was basically consistent with the forecast, and the performance of 2021q4 fell month on month. The net profit attributable to the parent company in 2021 is the lower limit of the performance forecast (there are 30000 tons of products in transit with unrecognized performance impact), and the net profit not attributable to the parent company is the median value of the performance forecast. The net profit attributable to the parent company in 2021q4 was 450 million yuan (Mom – 19%); Net profit after deduction of non return to parent company was RMB 400 million (Mom – 16%). Q4 performance fell month on month, mainly due to the sharp fluctuation of aluminum price. In 2021q4, the price of Changjiang nonferrous aluminum A00 reached 24240 yuan / ton on October 19, 2021, the lowest fell to 18330 yuan / ton (November 18), and the maximum decline during the period was 24%.
The profitability of a single ton has increased significantly, with ROE (diluted) of 17% and operating cash flow reaching a new high since listing. The growth of performance comes from: 1) volume increase: in 2021, the sales volume of aluminum sector and strip is 960000 tons (year-on-year + 15%), and the sales volume of aluminum foil is 190000 tons (year-on-year + 30%). 2) Price rise: in 2021, the processing fee was raised for many times, and the net profit deducted from non parent company for a single ton of aluminum products reached 1375 yuan, an increase of 64% compared with 831 yuan in 2020. 3) Cost reduction: 680000 T / a recycled aluminum production capacity is put into operation to reduce costs. 4) Indicator: the ROE (diluted) in 2021 increased by 5 percentage points to 17% compared with that in 2020, and the operating cash flow reached 2.07 billion yuan, which has exceeded the company’s net profit, mainly due to the adjustment of sales policy.
We will continue to develop high-end products, with an annual sales volume of 2 million tons in 2025. In 2021, the research and development cost was 950 million yuan, with a year-on-year increase of 84%. The company continued to increase the research and development of aluminum alloy blank for high-end anodizing, battery foil, power battery, aluminum for structural parts of new energy vehicles and battery trays, aluminum for rail transit, ship diaphragm, vehicle all aluminum tank car materials and other fields. At present, the projects under construction mainly include the production capacity of Guangyang aluminum industry project in South Korea, the production capacity of Mingsheng new material project is 300000 t / A, the production capacity of Yirui new material is 700000 T / A, recycled aluminum and green new aluminum alloy projects. The company expects that the annual sales volume will exceed 2 million tons in 2025, double that of 980000 tons in 2020.
Profit forecast, valuation and rating: Based on the continuous increase of processing fees, the continuous increase of the proportion of high-end products and the continuous decline of the cost caused by the landing of recycled aluminum, we are optimistic about the double rise of the company’s performance and valuation. Considering the fluctuation of aluminum price, we adjusted the company’s performance and added the performance forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2023 will be RMB 2.87/3.81 billion (adjusted by + 1.7% / + 0.5% compared with the previous forecast), and the net profit attributable to the parent company in 2024 will be RMB 4.53 billion, with a year-on-year increase of 55.1% / 32.5% / 19.1%. The PE valuation corresponding to the previous stock price is 9 / 7 / 6x respectively, maintaining the “overweight” rating.
Risk tip: risk of large fluctuation of aluminum price; The capacity release of the company’s projects under construction is less than expected; Risk of significant increase in accounts receivable.
