\u3000\u3000 Henan Mingtai Al.Industrial Co.Ltd(601677) (601677)
Event: after hours on January 17, the company issued a pre increase announcement of performance in 2021. It is estimated that the net profit attributable to the parent company will be RMB 1.85-1.95 billion in 2021, with a year-on-year increase of 73-82%; The net profit attributable to the parent company after deduction was RMB 1.55-1.65 billion, with a year-on-year increase of 92-104%.
Comments:
The net profit of 2021q4 decreased slightly month on month, and the sales volume of Q4 aluminum sector, strip and foil increased by 8% month on month. Based on the median performance forecast, the net profit attributable to the parent company in 2021q4 was 498 million yuan (Mom - 10.6%); Net profit after deduction of non return to parent company was 405 million yuan (Mom - 13.9%). The sales volume of 2021q4 aluminum sector, strip and foil is 314500 tons (mom + 8%), and the sales volume of aluminum profile is 4200 tons (mom + 5%).
The inventory impairment caused by the decline of aluminum price may be the main reason for the month on month decline of net profit in 2021q4. Q4 performance fell month on month, mainly due to inventory impairment caused by sharp fluctuations in aluminum prices. In 2021q4, the price of Changjiang nonferrous aluminum A00 reached 24240 yuan / ton on October 19, 2021, and Q4 fell to 18330 yuan / ton (November 18), with a maximum decline of 24%. As of 2021q3, the company's inventory was 3.7 billion yuan (an increase of 450 million yuan compared with 2021q2), and the decline of aluminum price may drag down profits.
The increase of processing fees and the production capacity of recycled aluminum have significantly improved the profitability of a single ton in the whole year. The performance growth in 2021 is mainly due to the increase of processing fees, sales growth and the production of recycled aluminum. 1) In 2021, the product processing fee was raised for many times, while the proportion of high-end products continued to increase, and the profitability was significantly enhanced; Calculated according to the median value of performance forecast, the net profit of non parent company deducted from a single ton of aluminum products in 2021 is 1356 yuan / ton, an increase of 64% compared with 825 yuan in 2020. 2) In 2021, the annual sales volume of aluminum sheet, strip and foil was 1157000 tons, with a year-on-year increase of 21%; The sales volume of aluminum profiles was 8600 tons, with a year-on-year increase of 73%. 3) The annual capacity of 680000 tons of recycled aluminum has been put into operation, bringing continuous cost optimization.
The production expansion project is gradually implemented, and the annual sales volume is planned to reach 2 million tons in 2025. The company's ongoing Guangyang aluminum project in Korea has added 120000 tons of capacity and has been put into operation; In jianmingsheng, new materials will add 200000-300000 tons of capacity, and the first phase will be put into operation in May 2021; The 700000 ton recycled aluminum and high-performance aluminum project under construction (with an investment of 3.6 billion yuan) has been started. The company expects that the annual sales volume will reach 2 million tons in 2025, double that of 980000 tons in 2020.
Profit forecast, valuation and rating: Based on the continuous decline in the cost caused by the increase of processing fee and the landing of recycled aluminum, we are optimistic about the double rise of the company's performance and valuation. Considering the impact of aluminum price fluctuation on the performance, we adjusted the company's performance forecast. From 2021 to 2023, the net profit attributable to the parent company was RMB 1.90/28.3/3.79 billion (adjusted by - 6% / + 1% / + 1% compared with the previous forecast), with a year-on-year increase of 77% / 49% / 34%. The PE valuation corresponding to the current stock price was 15 / 10 / 8x respectively, maintaining the "overweight" rating.
Risk tip: the capacity release of the company's projects under construction is less than expected; Risk of significant increase in accounts receivable; Risk of sharp fluctuations in aluminum prices.
