\u3000\u3000 Tianshan Aluminum Group Co.Ltd(002532) (002532)
Event: on January 25, 2022, the company issued the announcement of annual performance increase in 2021. It is estimated that the company will realize a net profit attributable to the parent company of 3.830 billion yuan in 2021, with a year-on-year increase of 100.28%, deducting a net profit not attributable to the parent company of 3.691 billion yuan, with a year-on-year increase of 97.56%. In a single quarter, Q4 is expected to realize a net profit attributable to the parent company of 598 million yuan, a month on month decrease of 52.2% and a year-on-year decrease of 12.9%. The performance was slightly lower than expected.
The price of raw materials fell and the performance elasticity was improved
① the price of raw materials rose and Q4 net profit fell month on month. (1) Volume: the company is less affected by production restriction. In 2021, the output of electrolytic aluminum was 1.154 million tons, with a year-on-year increase of 1.8%; (2) Price: the average tax inclusive price of Q4 electrolytic aluminum was 20043 yuan / ton, down 2.37% month on month; (3) Cost: alumina (Q4 + 24.96%), prebaked anode (Q4 + 17.87%), power coal price (Q4 + 48.08%), and the prices increased month on month; (4) Profit: the company’s alumina self-sufficiency rate is 39.3%, the outsourcing cost of alumina is high, and the self-sufficiency rate of prebaked anode is 84.8%. However, the price of petroleum coke and asphalt rises, the production cost rises, and the power self-sufficiency rate is 90%. However, the rising coal price pushes up the power cost, and the rising raw material price leads to the decline of Q4 profit month on month. However, at present, the cost side has fallen rapidly. As of January 20, In January, the industry’s average profit per ton of aluminum rebounded to 4985 yuan. ② The self-sufficiency rate of raw materials increased and the cost advantage was further consolidated. In 2021, the company’s alumina output was 907000 tons, with a year-on-year increase of 21.0%, and the alumina self-sufficiency rate was 39.3%, with a year-on-year increase of 6pct; The output of prebaked anode is 470000 tons, with a year-on-year increase of 48.9%, the self-sufficiency rate is 84.8%, and the year-on-year increase of 26.7pct. The proportion of self provided electricity of the company is 90%, which is the same year-on-year. The self-sufficiency rate of alumina and prebaked anode increases, which helps to reduce costs.
Future core focus:
① the self-sufficiency rate is further improved, and the integrated production optimizes the cost curve. Jingxi Tiangui phase II and phase III 1.7 million ton projects are progressing steadily. After being put into operation, Jingxi Tiangui alumina production capacity will reach 2.5 million tons / year. Guangxi is rich in bauxite resources and has strong cost and quality advantages compared with other regions. The 300000 ton prebaked anode carbon production capacity of Aral in southern Xinjiang has been put into operation in the first half of 2021. After the alumina project is completed, the company’s alumina and prebaked anode will be fully self-sufficient, and the self-sufficiency rate of electricity will be as high as 90%, which may reduce the cost pressure caused by the rise of raw material prices and optimize the cost curve.
② the construction of Xinjiang scenery base is accelerated, and the advantage of low electricity price is consolidated. Xinjiang is rich in coal and scenery resources. With the implementation of the double carbon policy, the installed capacity of wind and light may rise sharply. The construction of Northwest scenery base is accelerated. The electricity price in Xinjiang is expected to remain at a low level, the gap with the industry average electricity price will expand, and the cost advantage will be more obvious.
Investment suggestion: the supply of electrolytic aluminum recovers slowly, the demand is driven by steady growth, and the aluminum price is expected to remain high. With the alumina production capacity put into operation, the company will achieve self-sufficiency in basic raw materials in 2022. Due to the rising price of raw materials, we adjusted the profit forecast. It is expected that the company will realize a net profit attributable to the parent company of 3.864 billion yuan, 4.887 billion yuan and 5.284 billion yuan from 2021 to 2023, with corresponding EPS of 0.83 yuan, 1.05 yuan and 1.14 yuan respectively, and PE corresponding to the current stock price (January 25) of 10, 8 and 7 times respectively, maintaining the “recommended” rating of the company.
Risk tip: downstream demand is less than expected, overseas electrolytic aluminum production is more than expected, electrolytic aluminum price is down, etc
