In the past 22 years, the profit continued to grow at a high rate and the profit margin reached a new high: in 2021, the income of aluminum companies was 535497 billion yuan, with a year-on-year increase of 44.52%, and the net profit attributable to the parent company was 26.235 billion yuan, with a year-on-year increase of 224.52%; In Q1 of 22 years, the total revenue was 153083 billion yuan, with a year-on-year increase of 40.10% and a month on month increase of 3.4% over Q4 of 2021; The net profit attributable to the parent company was 9.060 billion yuan, an increase of 76.88% year-on-year and 118.87% month on month. The gross profit margin and net profit margin reached the highest level in recent 10 years in 2021, with 15.05% and 4.9% respectively. The gross profit margin in Q1 of 22 years decreased slightly year-on-year. However, thanks to good cost control, the net profit margin set a new record of 5.92%.
Electrolytic aluminum accounts for the main source of profit: with the establishment of electrolytic aluminum production capacity ceiling after the supply side reform and the pressure of dual control of energy consumption, electrolytic aluminum production capacity is the bottleneck and profit accumulation area in the industry chain. In 2021, the electrolytic aluminum sub sector accounted for 76.24% of the revenue of listed aluminum companies and 73.46% of the net profit attributable to the parent company, of which Aluminum Corporation Of China Limited(601600) was the largest, accounting for half of the revenue and profit of the sector. After excluding Aluminum Corporation Of China Limited(601600) , Tianshan Aluminum Group Co.Ltd(002532) , Shandong Nanshan Aluminium Co.Ltd(600219) , Yunnan Aluminium Co.Ltd(000807) , Henan Shenhuo Coal&Power Co.Ltd(000933) contributed 65.22% of the net profit of the sector in 21 years. From high to low, the gross profit per ton of aluminum in 21 years is Henan Shenhuo Coal&Power Co.Ltd(000933) , Tianshan Aluminum Group Co.Ltd(002532) , St Zhongfu, Aluminum Corporation Of China Limited(601600) , Yunnan Aluminium Co.Ltd(000807) and Jiao Zuo Wan Fang Aluminum Manufacturing Co.Ltd(000612) .
Q1 fund holdings reduction sector in 2022: Q1 sector was reduced by the fund as a whole in 2022, among which the top five with the largest number of holdings are Henan Mingtai Al.Industrial Co.Ltd(601677) , Aluminum Corporation Of China Limited(601600) , Shandong Nanshan Aluminium Co.Ltd(600219) , Yunnan Aluminium Co.Ltd(000807) and Tianshan Aluminum Group Co.Ltd(002532) . As of Q1 2022, the top five holding the largest number of funds are Henan Mingtai Al.Industrial Co.Ltd(601677) , Henan Shenhuo Coal&Power Co.Ltd(000933) , Yunnan Aluminium Co.Ltd(000807) , Aluminum Corporation Of China Limited(601600) and Shandong Nanshan Aluminium Co.Ltd(600219) .
Q2 performance is expected to decline by 10% month on month, and the profit growth in the first half of the year will drop to about 35%. In 2022, the release of supply will accelerate, and the production capacity of 2.95 million tons will increase after the resumption of production and new projects are put into operation. The demand will continue to be weak, and China’s supply will be loose. However, affected by the high prices in the overseas market, it is expected that imports will decrease, which will partially slow down the supply pressure in the Chinese market. It is estimated that the profit of Q2 tons of aluminum in 2022 will increase by 10% – 15% year-on-year and decrease by about 10% month on month compared with Q1; In the first half of the year, the profit growth rate dropped to about 35%.
Downgrade the industry rating to synchronous market-a: the investment logic of electrolytic aluminum in 2021 is that the first half of the year is the increase of demand, and the second half of the year is the supply constraint. Under the influence of the economic downturn and the correction of controllable policies, the above two factors will be alleviated periodically in 2022, and the trend and high-definition investment opportunities of the sector will be relatively weakened. Combined with the rhythm of capacity release, it is expected that the sector will still need 1-2 quarters to digest the pressure of capacity release and demand decline, We downgraded the industry rating to synchronous market-a.
Risk warning: downstream demand is less than expected; The water inflow of Southwest hydropower exceeded expectations; The change of electricity price or energy consumption policy leads to the change of production capacity exceeding expectations; Changes in overseas energy production or resumption of production beyond the expectation of the international market.
