\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 219 Shandong Nanshan Aluminium Co.Ltd(600219) )
Event: on March 27, 2022, the company disclosed the performance forecast for the first quarter of 2022. It is estimated that the net profit attributable to the parent company will reach 697778 million yuan in 2022q1, with a year-on-year increase of 30.04% – 45.15% and a month on month decrease of 12.3% – 21.4%; The net profit deducted from non parent company was RMB 686766 million, with a year-on-year increase of 30.92% – 46.18% and a month on month decrease of 10.4% – 19.8%. The company is mainly engaged in electrolytic aluminum and aluminum processing industry, and its performance shows significant seasonal changes. The month on month decline is in line with the industry law. The high prosperity of the aluminum industry and the horizontal and vertical extension of the company’s industrial chain support the company to achieve year-on-year high growth.
Aluminum price increases, aluminum processing improves quality and efficiency, and upstream and downstream profits thicken simultaneously. As a landmark enterprise in the aluminum industry, the company has an upstream capacity of about 800000 tons of electrolytic aluminum and supporting alumina and carbon, and fully enjoys the benefits of increasing profits in the electrolytic link brought by the rise of aluminum price; The middle and lower reaches have high-end aluminum processing production lines such as aluminum for new energy vehicles and can foil. The upgrading of product structure and the growth of production and marketing scale have realized the thickening of processing profits.
The investment and construction of new production capacity has been promoted in an orderly manner, and the performance growth rate is expected to remain high. (1) In terms of automobile sector, the company now has a production capacity of 200000 tons, and is currently promoting the construction of 200000 tons in phase III. in the future, the company may promote the conversion of tank material production line, so as to realize the long-term total production capacity planning of 7 China High-Speed Railway Technology Co.Ltd(000008) 00000 tons; (2) In terms of power battery foil, the 21000 ton power battery foil production line was officially completed for trial production in October 2021, and the performance is expected to be realized in 2022; (3) In terms of overseas alumina, the first phase of 1 million tons was completed and put into operation in May last year and reached production in September. The second phase of 1 million tons is currently under construction.
The proportion of high-end products has increased rapidly, and the consumption boom & industry barriers have laid the growth advantages of the company. The company is the core supplier of China’s automobile board, taking the lead in entering the international new energy vehicle main engine factory, successfully opening up the supply system of leading automobile enterprises such as Weilai and GAC, deeply binding the incremental source of market demand, and is expected to quickly realize the performance after the implementation of new production capacity. In addition, the increase in the proportion of high value-added products such as aviation board and power battery foil has brought about the growth momentum of the company’s performance. With the continuous promotion of the “double carbon” policy and the upgrading of product consumption, high-end aluminum processing products have achieved split and extended growth. The scale effect and expansion efficiency under the leading effect continue to bind new demand to the head enterprises. As the head supplier of high-end aluminum processing in China, the company is expected to fully benefit.
The recycled aluminum track is newly empowered, and the integration of aluminum industry is further improved. On March 10, 2022, the company successfully completed the government approval procedures for the report of Longkou recycled aluminum conservation and utilization project, and began to promote the construction of plant foundation. Compared with the original aluminum, the carbon emission of recycled aluminum is only about 7.8%, which has obvious “low-carbon” advantages. Under the full cycle carbon tracking mode of overseas demand trend industrial chain, low-carbon aluminum is expected to realize the premium advantage in the future.
Investment suggestion: the company’s high-end transformation continues to advance, with significant advantages in the lead of car boards, battery foils and other tracks, and the upstream performance under the support of high aluminum price is fully released. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 3.531 billion, RMB 4.587 billion and RMB 5.164 billion respectively, and the corresponding PE will be 14.0, 10.8 and 9.6 times respectively, maintaining the “buy” rating.
Risk warning: global macroeconomic fluctuation risk; The final consumption of aerospace sector is less than the expected risk; The transformation of product R & D achievements is less than expected risk, overseas business development risk, etc.
