\u3000\u3000 Henan Mingtai Al.Industrial Co.Ltd(601677) (601677)
It is expected that the net profit attributable to the parent company will increase by 73% to 82% year-on-year in 2021, maintaining the "buy" rating
On January 17, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach 1.85 billion yuan to 1.95 billion yuan in 2021, with a year-on-year increase of 73% to 82%, and the net profit deducted from non attributable to the parent company will reach 1.55 billion yuan to 1.65 billion yuan, with a year-on-year increase of 92% to 104%. Considering that the inventory loss caused by the decline of 2021q4 aluminum price and the provision of year-end expenses exceed the expectation, as well as the centralized release of high value-added products in 2023, we lowered the profit forecast for 2021, maintained 2022 and raised the profit forecast for 2023. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 1901 (- 1.07), RMB 2862 and RMB 3847 (+ 163) million respectively, and EPS will be RMB 279 (- 0.15) and RMB 4.19 and 5.64 (+ 0.24). The current share price corresponds to 15.3, 10.2 and 7.6 times of PE from 2021 to 2023 respectively. The impact of aluminum price decline and expense provision is short-term, which does not change the company's high growth attribute in the future and continues to maintain the "buy" rating.
Multiple factors work together to help the company achieve high performance growth
According to the company's announcement, the substantial growth of the company's performance in 2021 is mainly due to the significant increase in the production and sales of aluminum sector, strip and foil (the sales volume in 2021 is 1.18 million tons, with a year-on-year increase of about 21%), the continuous increase in the use of recycled aluminum, the repeated increase of processing fees and some inventory income contributed by the rise of aluminum price, etc. Quarterly, the net profit attributable to the parent company of 2021q1-q3 is RMB 323 million, RMB 521 million and RMB 557 million respectively. Meanwhile, the net profit attributable to the parent company of 2021q4 is expected to be RMB 448 million to RMB 548 million. If the median value is RMB 498 million, it will increase by 41.5% year-on-year and decrease by 10.6% month on month. Assuming that excluding the inventory loss caused by the decline of Q4 aluminum price and the provision of year-end expenses, the performance of 2021q4 company may still increase slightly month on month, and the profitability of single ton of aluminum sector, strip and foil may continue to improve.
The expansion of production and sales combined with the increase of gross profit per ton has made the company full of growth attributes
Looking forward to the future, with the successive implementation of projects under construction such as Yirui new material, Mingsheng new material and Korea Guangyang aluminum, it is expected that the production and sales volume of aluminum sector, strip and foil of the company is expected to reach more than 2 million tons in 2025. At the same time, with the increasing use of recycled aluminum (it is expected that the new 700000 tons of recycled aluminum production capacity will be gradually put into operation from Q1 2022) and the continuous upgrading of product structure (in the future, the new production capacity will be mostly distributed in high value-added fields such as battery foil, aluminum plastic film aluminum foil, power battery shell and automobile sector), the gross profit per ton of aluminum sector and foil products of the company will also be significantly improved. With the expansion of production and sales combined with the increase of gross profit per ton, the company's performance is expected to continue to maintain rapid growth.
Risk tip: the project commissioning process is not as expected, and the downstream demand has fallen sharply, etc.
