\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 677 Henan Mingtai Al.Industrial Co.Ltd(601677) )
Event: on March 18, 2022, the company issued the 2021 annual report. In 2021, the company achieved a revenue of 24.613 billion yuan, a year-on-year increase of 50.7%; The net profit attributable to the parent company was 1.852 billion yuan, a year-on-year increase of 73.1%; Net profit deducted from non parent company was 1.591 billion yuan, with a year-on-year increase of 96.7%. In 2021q4, the company achieved a revenue of 7.563 billion yuan, a year-on-year increase of 57.3% and a month on month increase of 20.2%; The net profit attributable to the parent company was 450 million yuan, with a year-on-year increase of 28.1% and a month on month decrease of 19.2%; Net profit deducted from non parent company was 396 million yuan, with a year-on-year increase of 82.8% and a month on month decrease of 15.9%. The performance is in line with our previous expectations.
The company's production capacity is released, and the product volume is rising at the same time. Benefiting from the release of project capacity and strong downstream demand, the production and sales of the company's products are booming. In 2021, the output of aluminum sector and strip is 966200 tons and the sales volume is 954500 tons, with a year-on-year increase of 16.14% and 15.38% respectively. The output of aluminum foil is 190800 tons and the sales volume is 190900 tons, with a year-on-year increase of 29.97% and 29.68% respectively. The company has sufficient orders and enhanced profitability. In 2021, the company's gross profit per ton of aluminum sheet and strip was 2531 yuan, an increase of 871 yuan year-on-year, and the gross profit per ton of aluminum foil was 3075 yuan, an increase of 976 yuan year-on-year. The gross profit margin and net profit margin were 12.8% and 7.7%, an increase of 1.01pct and 1.00pct respectively.
R & D investment continued to increase, the three fee rate decreased, and the cash flow improved significantly. With the continuous maturity of management, the company's operating efficiency continues to improve. In 2021, the company's three fee expense was 391 million yuan, a year-on-year decrease of 2.1%, the three fee rate was 1.6%, a year-on-year decrease of 0.9pct, of which the sales expense was 74 million yuan, a year-on-year increase of 16.5%, the management expense was 236 million yuan, a year-on-year increase of 27.9%, and the financial expense was 81 million yuan, a year-on-year decrease of 46.4%. In 2021, the company's net operating cash flow was 2.067 billion yuan, with a year-on-year increase of 136.1%. The operating cash flow continued to improve, mainly because the company's product sales collection is getting better, which also shows that the company's product demand is strong.
Future highlights: 1) in 2022, the production capacity of many projects will be released, and the performance may continue to grow rapidly. The 360000 ton recycled aluminum project of Yirui phase I of the company is expected to be put into operation in the first half of the year. The 300000 ton Mingsheng project and 120000 ton Guangyang project of South Korea will be implemented, and the production capacity will enter the release period, which will continue to catalyze the performance of the company. 2) Increase R & D, promote product transformation and upgrading, gradually increase the proportion of high value-added products, optimize the structure, continuously increase the company's R & D investment, optimize the product structure, and gradually increase the proportion of high value-added products such as aluminum for new energy, new materials, aluminum for transportation and aluminum for automobile lightweight. 3) The renewable aluminum industry has great potential, and the company is expected to benefit from the improvement of market concentration. At present, the company has 680000 tons of recycled aluminum and 120000 tons of aluminum ash projects, and a new 700000 tons of recycled aluminum projects. Under the background of China's "double carbon", the ceiling constraint of primary aluminum production capacity is obvious, and the renewable aluminum market ushers in vitality. With the implementation of fiscal and tax document No. 40, the renewable aluminum market will be further standardized, the concentration is expected to increase, and the company will benefit. 4) With the expansion of internal and external price difference, exports further boost performance, the overseas energy crisis continues, LME aluminum price rises sharply, and the internal and external price difference expands. The company's export products are priced in LME aluminum + processing fee mode, and the export volume and profit are expected to increase simultaneously.
Investment suggestion: with the implementation of the company's recycled aluminum and aluminum strip projects, the company's performance is expected to continue to grow. We expect that the company will realize a net profit attributable to the parent company of RMB 2.651 billion, RMB 3.288 billion and RMB 4.071 billion from 2022 to 2024, with EPS of RMB 3.88, RMB 4.82 and RMB 5.96 respectively. The PE corresponding to the closing price on March 18 is 10, 8 and 6 times respectively, maintaining the "recommended" rating.
Risk tip: the price of raw materials rises sharply, the release of production capacity is less than expected, and the downstream demand is less than expected.
