\u3000\u30 China Baoan Group Co.Ltd(000009) 33 Henan Shenhuo Coal&Power Co.Ltd(000933) )
In 2021, the company’s performance increased by 803% year-on-year. In 2021, the annual revenue was 34.452 billion yuan (+ 83.2%), the net profit attributable to the parent company was 3.234 billion yuan (+ 802.6%), the net profit not attributable to the parent company was 3.488 billion yuan (+ 3903.9%), and the net operating cash flow was 11.296 billion yuan (+ 556.1%). In the fourth quarter, the single quarter revenue was 9.631 billion yuan (+ 124.5%), the net profit attributable to the parent company was 935 million yuan (+ 795.4%), and the net profit not attributable to the parent company was 1.256 billion yuan (+ 691.8%). The company announced the profit distribution plan for 2021 and distributed a cash dividend of 4.50 yuan for every 10 shares to all shareholders.
The company’s performance increased significantly in 2021, mainly due to the increase in the volume and price of the company’s coal and electrolytic aluminum products. In 2021, the company’s primary aluminum output was 1.4066 million tons, with a year-on-year increase of 37.5%; Coal output was 6.5373 million tons, a year-on-year increase of 16.9%. In 2021, the average spot price of Changjiang aluminum including tax was 18905 yuan / ton, up 33.2% from the average price in 2020; In 2021, the price of Yongcheng anthracite washing medium block is 1500 yuan / ton, up 38.8% from the average price in 2020. In terms of regions, Xinjiang Shenhuo’s primary aluminum output has been stable at about 800000 tons; In 2021, Yunnan Shenhuo’s primary aluminum output was nearly Shanghai Pudong Development Bank Co.Ltd(600000) tons, an increase of nearly 400000 tons over 2020.
The asset liability ratio decreased and the financial expenses decreased slightly. By the end of 2021, the total assets of the company were 53.528 billion yuan, a decrease of 7.109 billion yuan over the end of 2020; By the end of 2021, the company’s liabilities totaled 39.153 billion yuan, a decrease of 9.058 billion yuan over the end of 2020, of which current liabilities decreased from 40.3 billion yuan at the end of 2020 to 33.1 billion yuan at the end of 2021, mainly due to the significant decrease in notes payable; Non current liabilities decreased from 7.9 billion yuan to 6.1 billion yuan. By the end of 2021, the company’s asset liability ratio had decreased to 73.1%, significantly lower than the level of 79.5% at the end of 2020. The company’s financial expenses in 2021 were 1.35 billion yuan, slightly lower than the level of 1.42 billion yuan in 2020.
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 from 2022 to 2024, 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, the price including tax of electricity in Yunnan is 0.41 yuan / kWh, and the cost of power generation in Xinjiang Shenhuo is 0.236 yuan / kWh. It is estimated that the revenue from 2022 to 2024 will be 38.8/424/43.4 billion yuan, with a year-on-year growth rate of 12.5/9.3/2.4%, and the net profit attributable to the parent company will be 53.32/58.44/61.09 billion yuan, with a year-on-year growth rate of 64.9/9.6/4.5%; Diluted EPS = 2.37/2.60/2.71 yuan, and the current share price corresponds to PE = 6.3/5.7/5.5x. The company is the leading enterprise of electrolytic aluminum in China. The production capacity layout is reasonable, and the production cost of electrolytic aluminum is less affected by the fluctuation of coal price. The company’s main products electrolytic aluminum and coal will usher in the output release period, benefit significantly from the high business cycle of electrolytic aluminum and coal industry, and maintain the “buy” rating.
