\u3000\u3000 Henan Mingtai Al.Industrial Co.Ltd(601677) (601677)
Event: on January 17, 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 be RMB 1.85-1.95 billion, with a year-on-year increase of 73% - 82%, deducting the net profit not attributable to the parent company of RMB 1.55-1.65 billion, with a year-on-year increase of 92% - 104%; In a single quarter, the net profit attributable to the parent company in 2021q4 was 448-548 million yuan, with a month on month decrease (- 19.6%) - (- 1.6%) and a year-on-year increase of 27.5% - 55.9%.
The profit per ton continued to be high, and the return on assets continued to achieve good results. The company's sales of 2021q4 aluminum sector, strip, foil and aluminum profile reached 314500 tons and 4200 tons respectively, with a month on month increase of 8.5% and 2.4% compared with the third quarter, and a total month on month increase of 8.36%. Under simple estimation, the net profit of a single ton of aluminum products in the fourth quarter was 1407-1721 yuan, down about 359 yuan / ton month on month, down about 193.6 yuan / ton compared with the second quarter (calculated on average); The non net profit deducted per ton was 1114-1428 yuan, a month on month decrease of about 329 yuan / ton. In terms of profit margin, we estimate that the company's annualized return on net assets in the fourth quarter is 19.5%, and the annual return on net assets is about 20.1%, an increase of 6.13pcts compared with 2020, and the profitability of 2021 is greatly improved.
The production and marketing level of aluminum sheet, strip and foil basically completed the annual target, and reached a new high in the fourth quarter of the year. The company's annual production and sales target of aluminum sector, strip and foil is 1.2 million tons, with an output of 572000 tons in the first half of the year and a sales target of 630000 tons in the second half of the year. The actual production and sales target of 587000 tons is basically achieved. Quarterly, 2021q3 is disturbed by flood, epidemic and other irresistible factors, and the production and marketing level of the company is slightly lower than expected. In the fourth quarter, the production and sales volume reached 2995 / 314500 tons respectively, with a month on month increase of 1.17/2450 tons, recording the best data of the whole year.
The newly planned 700000 ton capacity project contributes to the growth increment, and it is expected to achieve a capacity of 2 million tons by the end of 2023. The construction period of the project is expected to be two years, corresponding to the completion by the end of 2023. The company's existing production capacity is about 1.3 million tons. After the new production capacity is put into operation, the company's aluminum processing scale will reach 2 million tons in advance, and has a scale of 1.4 million tons of recycled aluminum, laying a solid foundation for the company's production and sales scale of 2 million tons in 2025.
According to the feasibility study, the profitability of the new production capacity is stable to ensure the steady growth of the company's performance. According to the feasibility study report of the project, after the new production capacity is reached, the revenue can reach 14.73 billion yuan, the total net profit is 705 million yuan, the corresponding net profit per ton is 1007.14 yuan / ton, and the net interest rate is 4.79%. In 2020, the average net profit per ton of aluminum processing products will be 1075 yuan / ton, and about 1607 yuan / ton in 2021. It is expected that after the implementation of the new project, the company will continue the high-quality expansion of production capacity and maintain the existing overall profitability.
Investment suggestion: as a leader in China's aluminum processing industry, the company has built a core competitive advantage in operating costs. Through R & D drive and advanced equipment investment, the company has entered the field of intensive and deep processing to realize the docking of product production lines and high growth market space. The improvement of single ton processing fee and capacity utilization is expected to bring steady growth in performance. In addition, relying on the steady operation of the management and the sales department with high executive power, the company is expected to quickly realize its performance after the implementation of production capacity, reflecting its long-term competitive advantage. We expect the net profit attributable to the parent company from 2021 to 2023 to be RMB 1.940 billion, RMB 2.480 billion and RMB 2.995 billion respectively, corresponding to PE of 14.9, 11.7 and 9.7 times respectively, maintaining the "buy" rating.
Risk warning: material price fluctuation risk; Market vicious competition risk; Risk of cash flow exceeding expected fluctuation
