21 Mar

Yunnan Aluminum (000807) 2019H1 Performance Preview Comment: Industry and Company Resonant Semi-annual Report Performance Exceeds Expectations

Yunnan Aluminum (000807) 2019H1 Performance Preview Comment: Industry and Company Resonant Semi-annual Report Performance Exceeds Expectations

Investment Highlights The company released a 2019H1 performance forecast that exceeded expectations: It is expected that the company will achieve net profit attributable to mothers in 2019H1.

62 ppm, an increase of 236% per year; start to calculate the net profit attributable to the mother to 1 in Q2 2019.

1.1 billion, a significant increase of 119% month-on-month and a year-on-year decrease of 27.

3%.

The overall performance of 2019H1 exceeded expectations.

  The electrolytic aluminum industry bottomed out and rebounded, and the company strengthened management to jointly improve the company’s performance.

In terms of industry, the 2019H1 aluminum price is 13,792 yuan / ton, which has fallen for 3 years.

6%, but our estimated 2019H1 ton aluminum profit is expected to be 393 yuan / ton, which is basically the same as the previous year.

However, considering the company’s new production capacity in Q2, production and sales are expected to increase significantly in Q2, and the profit per ton of aluminum in Q2 is reduced by 492 yuan from Q1.

Therefore, the bottoming out of the electrolytic aluminum industry has completely improved the company’s Q2 performance.

The company’s scale, new project electricity charges, and enhanced management improved performance.

In the second quarter of 2019, Haixin Aluminum’s first phase project and the Heqing Yixin project were put into production. The electricity prices of these new production capacity were higher than the company’s original stock of electricity generation, and China Aluminum Corporation’s holding company strengthened management and paid close attention to costs.The company’s performance improvement has achieved positive results.

  We are optimistic about the short-term improvement of electrolytic aluminum and the development of the medium and long-term industry.

In the third quarter, the supply and demand of electrolytic aluminum is expected to continue to improve, and the profit of the industrial chain is inclined to the electrolytic aluminum industry.

First, the supply of electrolytic aluminum continued to be lower than expected.

Since the start of production and withdrawal this year, it has substantially exceeded expectations, which has caused electrolytic aluminum stocks to exceed expectations when the peak season is approaching.

Demand in the second half of the year is generally better than in the first half, especially in the case of real estate and automotive chain improvement, electrolytic aluminum is expected to continue to improve supply and demand at low inventory 北京夜网 levels.

Second, alumina has been in surplus since this year, and the price trend has increased, which is also good for improving the profitability of electrolytic aluminum.

  In the medium and long term, the electrolytic aluminum industry has the characteristics of capacity expansion and application expansion.

  Profit forecast and grade: Adjust the performance forecast for 2019-2021, and expect to achieve net profit attributable to mothers respectively.

2.6 billion, 11.

1.5 billion, 15.

53 trillion, EPS is 0.

20 yuan, 0.

43 yuan, 0.

60 yuan, the PE calculated at the closing price on July 12 is 23X, 11X, 8X.

Taking into account the company’s continued expansion of new production budgets, and the implementation of safeguard projects, it will maintain a level of “prudent increase”.

  Risk warning: Aluminum prices are not as expected, new projects are not put into production, and electricity costs are not as expected