\u3000\u3000 Henan Mingtai Al.Industrial Co.Ltd(601677) (601677)
Event: on January 18, 2022, the company issued the announcement of annual performance increase in 2021. It is estimated that the net profit attributable to the parent company in 2021 will reach RMB 1.85 billion to RMB 1.95 billion, with a year-on-year increase of 73% to 82%, deducting the net profit not attributable to the parent company from RMB 1.55 billion to RMB 1.65 billion, with a year-on-year increase of 92% to 104%. In a single quarter, Q4 realized a net profit attributable to the parent company of 448 million yuan to 548 million yuan, an increase of 27.5% to 55.9% year-on-year and a decrease of 19.5% to 1.6% month on month. The performance meets the consistent expectations of wind.
The volume and price of aluminum sector, strip and foil increased simultaneously, and the performance increased significantly year-on-year. In terms of volume, the company completed the sales of 1180200 tons of aluminum sector, strip and foil in 2021, an increase of about 210000 tons over the previous year, a year-on-year increase of about 21%, and the sales of aluminum profiles were 15000 tons, a year-on-year increase of 74%. Continued the continuous growth momentum of production and sales, and continuously improved the market share and industry influence. In terms of price, there was strong demand in the downstream market during the reporting period, and the company raised the product processing fee for many times. In terms of cost, the company has continuously promoted cost reduction and efficiency increase, continuously improved the production process and management level, reached the international advanced level for the comprehensive utilization project of recycled aluminum and aluminum ash, further reduced the production cost and thickened the profit space. In terms of product structure, the company's new product market development has achieved remarkable results, the proportion of products in high value-added fields such as automobile lightweight, new energy and new consumption has been increasing, the product structure has been continuously improved, and the company's gross profit margin is expected to increase to a certain extent.
In a single quarter, Q4 profit fell month on month, or mainly due to the rapid decline of aluminum price in the fourth quarter and the decline of inventory price. The company's Q4 net profit attributable to the parent company decreased by 19.5% to 1.6% month on month. From the perspective of volume and price, the production and sales volume of aluminum sector, strip and foil Q4 increased by 4.07% and 8.45% month on month respectively, and the ring ratio of product processing fee did not decrease. From the perspective of raw material prices, although the average price of electrolytic aluminum Q4 fell by only 2.37% month on month to 20043 yuan / ton, it has been in a unilateral decline, which may lead to the decline of inventory and profit when the company purchases electrolytic aluminum raw materials.
Future core focus:
① many projects were implemented during the year, and the release of production capacity accelerated. The company's projects under construction, Korea Guangyang aluminum project (with an additional capacity of 100000 tons), Mingsheng new material project phase I (with an additional capacity of 200000-300000 tons) are gradually put into operation, and the capacity is released one after another. The 700000 ton green new aluminum alloy material project has been started. The construction period is two years, and the average annual net profit is 705 million yuan and the internal rate of return is 18.3%. With the gradual release of the company's production capacity, the annual sales volume may exceed 2 million tons in 2025.
② overweight recycled aluminum business, or will continue to benefit from "carbon neutralization". The company has arranged the circular economy model in advance, and has formed an annual capacity of processing more than 680000 tons of waste aluminum (200000 tons of waste aluminum project, 360000 tons of recycled aluminum alloy flat ingot project and 120000 tons of aluminum ash project). In addition, the company's 700000 tons of recycled aluminum and high-performance aluminum projects (with a total investment of 3.6 billion) have been started, which may continue to benefit from the national "double carbon" policy requirements in the future.
Investment suggestion: the volume and price of the company's products rise together, and the release of production capacity will gradually accelerate in the future as the project reaches production capacity. We adjusted the company's profit forecast. It is estimated that from 2021 to 2023, the company's net profit attributable to the parent company will be 1.918 billion yuan, 2.483 billion yuan and 2.996 billion yuan, corresponding to EPS of 2.81 yuan, 3.64 yuan and 4.39 yuan respectively, corresponding to PE of current stock price (January 17) of 15 times, 12 times and 10 times respectively, maintaining the company's "recommended" rating.
Risk tips: the project progress does not meet expectations, downstream demand does not meet expectations, customer development does not meet expectations, etc.
