\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 07 Yunnan Aluminium Co.Ltd(000807) )
Core view
In 2021, the company’s performance increased by 268% year-on-year. In 2021, the annual revenue was 41.669 billion yuan (+ 40.90%), the net profit attributable to the parent company was 3.319 billion yuan (+ 267.74%), the net profit not attributable to the parent company was 3.312 billion yuan (+ 329.63%), and the net operating cash flow was 6.962 billion yuan (+ 39.77%). In the fourth quarter, the single quarter revenue was 9.546 billion yuan (- 1.38%), the net profit attributable to the parent company was 87 million yuan (- 73.75%), and the net profit not attributable to the parent company was 98 million yuan (- 71.42%). In 2021, the company accrued various credit impairment reserves and asset impairment reserves totaling 1.99 billion yuan.
Last year, the double control of energy consumption and power shortage in Yunnan caused the company to reduce production by 770000 tons, accounting for more than 25% of the company’s production capacity. Superimposed on the leakage of Wenshan aluminum in November last year, the production and sales volume was much lower than expected, and the performance in the fourth quarter was poor. The company’s annual performance growth mainly benefited from high aluminum prices. In 2021, the company’s primary aluminum output was 2.3002 million tons, a year-on-year decrease of 4.41%, while the average spot price of Changjiang aluminum including tax in 2021 was 18905 yuan / ton, up 33.2% from the average price in 2020.
The asset liability ratio decreased and the financial expenses decreased. By the end of 2021, the company’s liabilities totaled 16.927 billion yuan, a decrease of 10.333 billion yuan over the end of 2020, including current liabilities decreased from 17.4 billion yuan at the end of 2020 to 9.8 billion yuan at the end of 2021, non current liabilities decreased from 9.9 billion yuan to 7.1 billion yuan, and the company’s long-term and short-term borrowings and operating payables decreased significantly. By the end of 2021, the company’s asset liability ratio had decreased to 44.7%, significantly lower than the level of 66.5% at the end of 2020. The company’s financial expenses in 2021 were 588 million yuan, 9.1% lower than that in 2020.
This year will usher in a production release period. Since 2022, with the loose power consumption index, the company’s resumption of production and new production have accelerated, which is expected to get rid of the impact of power shortage and usher in the output release period. According to the production and operation plan disclosed in the company’s annual report, the company will produce 1.4 million tons of alumina and 2.69 million tons of electrolytic aluminum in 2022.
Risk tip: the release of production capacity is lower than expected, and there is a significant upward risk of alumina price.
Investment advice: maintain the “buy” rating
We conservatively assume that in 20222024, the spot price of aluminum is 20000 yuan / ton, the price of alumina is 3000 yuan / ton, the price of pre baked anode is 5000 yuan / ton, and the price including tax of the company’s electricity is 0.41 yuan / kWh. It is estimated that the revenue in 20222024 will be 48.4/54.6/57.4 billion yuan, with a year-on-year growth rate of 16.1/12.8/5.2%, and the net profit attributable to the parent company will be 55.42/65.617053 billion yuan, with a year-on-year growth rate of 67.0/18.4/7.5%; Diluted EPS = 1.60/1.89/2.03 yuan, and the current share price corresponds to PE = 8.6/7.3/6.8x. The company is a leading enterprise of green hydropower aluminum in China. The power cost is low and stable. It fully benefits from the high profit cycle of electrolytic aluminum and maintains the “buy” rating.
