\u3000\u3000 Henan Mingtai Al.Industrial Co.Ltd(601677) (601677)
Core view
Event: the company released the annual performance forecast for 2021. It is estimated that the annual net profit attributable to the parent company will be RMB 1.85-1.95 billion, with a year-on-year increase of 73% – 82%. In the fourth quarter, the net profit attributable to the parent company in a single quarter was about 450-550 million yuan, an increase of 28-56% year-on-year and a decrease of 2% – 20% month on month.
The sales volume exceeded 300000 tons in a single quarter, and the production capacity and industry influence continued to improve. The company’s 21q4 sales volume exceeded 300000 tons for the first time, realizing 318700 tons of aluminum sales, an increase of 8% month on month. The annual sales volume reached 1.195 million tons, including 1.18 million tons of aluminum sector, strip and foil, with a year-on-year increase of 21%, close to the annual production and sales target of 1.2 million tons.
The annual net profit per ton was 1548-1632 yuan / ton, with a year-on-year increase of 42% – 50%. Compared with last year, the company’s profitability has increased significantly, which mainly benefits from three points: ① product structure optimization. The company disclosed that the development of new product market in 2021 has achieved remarkable results, especially in high value-added fields such as automobile lightweight, new energy and new consumption. The company’s R & D in the above fields has also been strengthened, and the added value of products is expected to continue to increase; ② The prosperity of the industry has improved, and the strong demand for new energy has spilled over, driving the overall demand of the aluminum sector, strip and foil industry. As a leading enterprise, the company has raised the processing fee for many times since the beginning of 2021, especially in the third and fourth quarters, and is expected to continue until 2022; ③ Recycled aluminum can increase the profit margin. At present, the company’s recycled aluminum accounts for 70% of the total aluminum consumption. Compared with raw aluminum, it has procurement advantages on the cost side, and the green premium on the sales side will gradually appear.
Aluminum prices stabilized and rebounded, and the net profit per ton is expected to rebound. Although the processing fee increased again in the fourth quarter, the company’s net profit per ton of 21q4 was 1407-1721 yuan / ton, which decreased for the first time in 2021, down 9% – 26% month on month. We believe that this may be related to the unilateral decline of aluminum price from October to November. Affected by the fluctuation of coal price, the average price of A00 aluminum of Changjiang nonferrous metals decreased from a high of 24240 yuan / ton to 18330 yuan / ton during this period, a decrease of 32%. According to the judgment of our 2022 nonferrous metals industry strategy report, the aluminum price is tight throughout the year, and the sharp fluctuation on the cost side last year is difficult to reappear. It is expected that the aluminum price will stabilize and recover, and the company’s single ton profit is expected to return to the upward period
Profit forecast and investment suggestions
We predict that the company’s earnings per share from 2021 to 2023 will be 2.80 yuan, 3.47 yuan and 4.13 yuan respectively. According to the 22-year 17xpe valuation of the comparable company, we maintain the buy rating, and the target price is 59.02 yuan.
Risk tips
The progress of raised investment projects is less than the expected risk, the product upgrade is less than the expected risk, the macroeconomic growth rate slows down, and the risk of repeated global epidemics
