\u3000\u3000 Shandong Nanshan Aluminium Co.Ltd(600219) (600219)
Event: on January 13, 2022, the company issued the announcement of performance increase in 2021. It is estimated that the net profit attributable to the parent company in 2021 will reach RMB 3.08 billion to RMB 3.515 billion, with a year-on-year increase of 50.32% to 71.55%, deducting the net profit not attributable to the parent company from RMB 3.02 billion to RMB 3.666 billion, with a year-on-year increase of 53.06% to 75.40%. In a single quarter, Q4 realized a net profit attributable to the parent company of 561 million yuan to 996 million yuan, a month on month decrease of 44.62% to 1.66%, and a year-on-year change of – 11.77% to + 56.69%. The performance is in line with expectations.
The year-on-year increase in net profit attributable to the parent company was due to the simultaneous rise in the volume and price of main products during the reporting period, creating the best annual performance in history. In terms of volume, the company will gradually put into operation many projects in 2021, including 21000 tons of power battery foil project, automobile plate climbing production and Indonesia alumina project; In terms of price, the company continues to adjust its product structure, the proportion of high-end products continues to increase, and the overall gross profit margin may increase. The average prices of electrolytic aluminum and alumina in 2021 were 18950 yuan / ton and 2755 yuan / ton respectively, with a year-on-year increase of 33.75% and 17.13%. At the same time, some of the company’s processed products are affected by market supply and demand, and the processing fee has increased, opening up profit space.
On a month on month basis, Q4 performance declined on a month on month basis, mainly due to the erosion of profits due to the increase of cost side. Due to the continuous shortage of electricity, the price of thermal coal once soared to 2000 yuan / ton in October. Because the company is located in Shandong Province, which is 100% of its own power plant, the power generation cost may increase greatly.
Automobile aluminum alloy plates continue to be produced in large quantities, and the processing capacity of automobile plates is expected to reach 400000 tons in 2023. With the in-depth promotion of the national dual carbon strategy, new energy vehicles are booming. Thanks to the strong demand brought by downstream industries, the production and sales of the company’s automobile board products were booming in 2021, with a significant increase over the same period last year, the sales volume exceeded 110000 tons, and the overall profit increased significantly. With a self raised fund of about 2 billion yuan, the company will increase the annual production capacity of automobile plate by 200000 tons again. The project is expected to be put into operation in 2023. At that time, the company may have an automobile plate production capacity of 400000 tons / year, and there is room for double growth on the current basis.
China’s 7 series production capacity is scarce, and aerospace projects may accelerate the company’s growth. Under the background of accelerated localization process and scarce production capacity of 7-series alloys in China, the aviation field is gradually emerging from the attack of the epidemic. With the gradual implementation of the production capacity of the company’s aerospace high-end aluminum alloy technical transformation project, the large volume of aviation plates may become a new profit growth point of the company.
Indonesia’s alumina project is gradually increasing in volume, which is a new profit growth point for the company. The alumina project has a total capacity of 2 million tons. It is constructed in two phases and started at the end of 18 years. Phase I has been put into operation in May 2021 and is currently in full production. Phase II is expected to be put into operation in the first quarter of this year. According to the average price of alumina of 2749 yuan / ton, caustic soda of 2340 yuan / ton and bauxite price of 312 yuan / ton in 2021, the full cost of alumina excluding tax is 2247 yuan / ton. It is conservatively estimated that after the two phases are fully completed, the profit will be increased by 1.009 billion yuan / year.
Investment suggestion: the company’s high-end aluminum processing products continue to be in large quantities and usher in the performance harvest season. We adjusted the profit forecast. It is estimated that the company will realize a net profit attributable to the parent company of 3.478 billion yuan, 4.335 billion yuan and 5.226 billion yuan from 2021 to 2023, with EPS of 0.29 yuan, 0.36 yuan and 0.44 yuan respectively; The PE corresponding to the closing price on January 12 was 16, 13 and 11 times respectively, maintaining the “recommended” rating.
Risk tips: project progress is not as expected, terminal certification is not as expected, aluminum price fluctuates greatly, etc
