\u3000\u30 China Baoan Group Co.Ltd(000009) 33 Henan Shenhuo Coal&Power Co.Ltd(000933) )
Event: the company released the performance forecast for the first quarter of 2022 on April 14. It is estimated that the net profit attributable to the shareholders of the listed company will be 1.74 billion yuan, a year-on-year increase of 197.7%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 1.73 billion yuan, a year-on-year increase of 237%.
Comments:
The performance growth is due to the fact that the price increase of coal and aluminum products is higher than the cost increase. 1) The price of electrolytic aluminum increased by 17.85% year-on-year in the first quarter, excluding aluminum tax. 2) Cost: the unit full cost of electrolytic aluminum increased by 31.95% year-on-year due to the increase of power, anode carbon block, labor and other costs; Among them, the unit full cost in Xinjiang increased by 22.54% year-on-year; Affected by the cancellation of preferential electricity prices by the government and incomplete production in Yunnan, the unit full cost increased by 46.35% year-on-year. The unit full cost of coal increased by 28.30% year-on-year due to the impact of the conversion of projects under construction, the release of output less than expected and the increase of materials, labor and other costs in some mines.
The short-term disturbance of the epidemic is optimistic about the rise of aluminum prices after the resumption of work. China's electrolytic aluminum enterprises gradually resume production, but the overall increase rate of output is slow; Overseas supply is still tight. As of April 11, the national spot inventory of electrolytic aluminum was 1.061 million tons, down 83000 tons from the inventory peak on March 7, and the stock removal was slow, mainly due to the short-term disturbance of the epidemic to the downstream operating rate; According to SMM data, as of the week of April 7, the operating rate of leading aluminum downstream processing enterprises fell by another 0.7 percentage points to 66.6% month on month. After the epidemic gradually eased, the downstream operating rate is expected to gradually recover and continue to be optimistic about the subsequent rise in aluminum prices.
Yunnan Shenhuo's 900000 ton production capacity was fully put into operation at the end of April, and the annual electrolytic aluminum output is expected to exceed expectations. On March 28, the company announced that due to the abundant water in the dry season and the easing of power supply in Yunnan, since February 2, the 220000 ton production capacity of Yunnan Shenhuo, the holding subsidiary, has been started successively, and the remaining 150000 ton production capacity that has been completed but not started has also been powered on and started. The 900000 ton production capacity of Yunnan will be put into operation by the end of April, and the annual electrolytic aluminum output is expected to exceed the annual planning of 1.4 million tons.
Profit forecast, valuation and rating: considering the continuous rise of coal and aluminum prices and the accelerated resumption of electrolytic aluminum production capacity of Yunnan Shenhuo, the profit forecast of the company is raised. It is estimated that the net profit attributable to the parent company in 2022 / 2023 / 2024 will be 7 / 78 / 8.1 billion yuan (up 12% / 17% / 15%), and the PE corresponding to the current stock price will be 5.0 / 4.4 / 4.3 times respectively, maintaining the "overweight" rating.
Risk tip: the uncertainty of the impact of Yunnan power restriction policy on output; Long term high risk of interest bearing liabilities; Risk of falling aluminum and coal prices.
