\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) Founder Technology Group Co.Ltd(600601) 600)
On March 22, 2022, the company released its 2021 annual report. In 2021, the company achieved a revenue of 269748 billion yuan, a year-on-year increase of 45.03%; The net profit attributable to the parent company was 5.079 billion yuan, a year-on-year increase of 585.5%; Net profit deducted from non parent company was RMB 7.029 billion, with a year-on-year increase of 1687%. In 2021q4, the company achieved a revenue of 74.819 billion yuan, a year-on-year increase of 41.6% and a month on month increase of 0.8%; The net profit attributable to the parent company was – 228 million yuan, a year-on-year decrease of 178.8% and a month on month decrease of 110.2%; Net profit deducted from non parent company was RMB – 97 million, a year-on-year decrease of 137.8% and a month on month decrease of 103.5%. The performance is in line with our previous expectations.
The output was relatively stable, and the gross profit per ton rose sharply. Volume: the company’s primary aluminum output in 2021 was 3.86 million tons, a year-on-year decrease of 4.6%, mainly due to the impact of the film industry. The alumina output was 16.23 million tons, a year-on-year increase of 11.7%. Price: in 2021, the company sold 18800 yuan per ton of aluminum, with a year-on-year increase of 36.8%, and the cost per ton was 15300 yuan, with a year-on-year increase of 26.5%. The cost increase was mainly due to the increase of purchase price from 0.15 yuan to 0.52 yuan kW / h; The selling price per ton of alumina was 3372 yuan, a year-on-year increase of 21.4%, and the cost per ton was 2673 yuan, a year-on-year increase of 2.6%, mainly because the company was basically self-sufficient in bauxite, and the cost was less affected. Profit: gross profit per ton of aluminum is 3513 yuan, with a year-on-year increase of 1866 yuan; The gross profit per ton of alumina was 699 yuan, an increase of 405 yuan year-on-year, and the gross profit per ton increased sharply. In terms of gross profit distribution, alumina accounts for 38% (mainly because the domestic sales of alumina are calculated according to the market price, and the gross profit is included in the alumina sector), electrolytic aluminum accounts for 45%, and trade and energy account for 8.7% and 8.4% respectively.
Third, the fee rate continued to decline, and the impairment dragged down the performance. The operating efficiency of the company was improved and the three fee rate continued to decline. The three fee rate of the company was 2.9% in 2021, with a year-on-year decrease of 1.8pct, mainly due to the change of sales expense subjects and the decrease of interest expenses. In 2021, the company accrued 3.07 billion yuan of impairment for discontinued, idle and under production operating assets, and 1.39 billion yuan of credit loss for receivables, with a total impairment of 4.45 billion yuan, affecting the net profit attributable to the parent company of about 2.1 billion yuan. With the loosening of energy consumption control, the company’s capacity utilization will increase, and the impairment loss is expected to decrease in the future.
Future highlights: 1) the supply of overseas electrolytic aluminum is limited, and the supply and demand pattern of the industry is good. The European energy crisis continues, electrolytic aluminum has a large loss, and the scale of production reduction continues to expand. With the increase of power supply, China’s output recovers, while China’s demand is moving towards the peak season, and the high internal and external price difference is expected to drive the rise of exports. China’s external demand resonates, the supply and demand pattern of electrolytic aluminum remains unchanged, and the price performance is strong. 2) The company has integrated industrial chain layout, obvious cost advantages and fully enjoys the benefits of rising aluminum prices. The company adheres to the integrated layout of aluminum industry chain, with a high self-sufficiency rate of raw materials. The self-sufficiency rate of bauxite is about 70%, alumina is 100% and power is more than 20%. The integrated layout helps the company better control costs and fully enjoy the benefits brought by the rise of aluminum price. 3) China’s power shortage has eased and the resumption of production provides increment. The production capacity of the company is about 4.5 million tons, and the capacity utilization rate is low. With the increase of China’s power supply, the resumption of production of the company will be accelerated and the output will be significantly increased.
Investment suggestion: the pattern of electrolytic aluminum industry is good. With the resumption of production, the company’s performance will continue to release. We expect the company to realize the net profit attributable to the parent company of 12.675 billion yuan, 15.473 billion yuan and 18.086 billion yuan from 2022 to 2024, with EPS of 0.74 yuan, 0.91 yuan and 1.06 yuan respectively. The PE corresponding to the closing price on March 22 is 8, 7 and 6 times respectively, maintaining the “recommended” rating.
Risk tip: the demand for electrolytic aluminum is less than expected; The resumption of production of the project is less than expected.
