Yunnan Aluminum (000807) Quarterly Report Review 2019: Downward Costs Profit Transfer from Industrial Chain Boosts Company Performance

Mar 21, 2020 桑拿

Yunnan Aluminum (000807) Quarterly Report Review 2019: Downward Costs Profit Transfer from Industrial Chain Boosts Company Performance

Yunnan Aluminum (000807) Quarterly Report Review 2019: Downward Costs Profit Transfer from Industrial Chain Boosts Company Performance

Core points: 1.

Incident Yun Aluminum issued the first quarter of 2019 report, and the company achieved operating income of 50 in the first quarter of 2019.

73 ‰, a decrease of one year.

99%; net profit attributable to parent company is 0.

$ 5.1 billion turned around, with an annual increase of 148.

32%; realized profit of 0.

02 yuan.


Our Analysis and Judgment (1) Aluminum prices rebounded, and cost declines boosted the company’s performance report performance. As the prices of aluminum products rebounded and the prices of raw materials fell, this led to a redistribution of profits on the aluminum industry chain.The shift from the end to the electrolytic aluminum end drove the company’s profitability to recover.

In addition, at the end of 2018, provision for inventory depreciation resale and government subsidies have been provided to enhance the company’s performance.

Although the average price of aluminum ingots in China in 2019Q1 was 13,542.

24 yuan / ton, temporarily down 4.

48%, but the decline in the fourth quarter of last year narrowed4.

29 digits; the price of aluminum in February and March increased by 0.

89% and 2.


The 2019Q1 average price of alumina and prebaked anodes for electrolytic aluminum is 2824.

74 yuan / ton and 3822.

81 yuan / ton, respectively reduced by 0.

96% and 11.


The company’s operating cost in 2019Q1 was 45.

1.1 billion, down 4 a year.

25%; causing the company’s gross profit margin to reach 11 in 2019Q1.

08%, an increase of 3 per year.

02 units.

The net profit after deducting non-attributed mothers was RMB 8 million, an increase of 106.

88%, although the large government subsidy is included in non-recurring gains and losses, as a national environmentally friendly enterprise company featuring hydropower aluminum, it has received a large number of government subsidies for a long time, from 27.10 million yuan in 2016 to 67.57 million yuan in 2018.The year-on-year growth has helped the overall company performance.

(II) Increased capital in Haixin, hydropower aluminum production expansion and high-precision aluminum foil projects have steadily advanced and consolidated the company’s future growth. The company’s layout in hydropower aluminum, alumina, anode carbon and other expansion projects and aluminum foil, battery foil, and aluminum development projectsSteady progress.

The company intends to acquire Yunalumi Haixin 17 held by Yiliang Chihong Mining.

89% of the shares, the company’s direct shareholding ratio currently reaches 63.

99%. In 2018, the net profit scale of Yunalumi Haixin 合肥夜网 reached 11.56 million yuan. After the capital increase of Yunalumi Haixin is completed, the company’s profits will be thickened; the holding subsidiary Heqing Yixin intends to acquire Shanxi Huasheng AluminumThe 19 cation electrolytic aluminum index of the industry supports the second-phase engineering planning of the Heqing Hydropower Aluminum Project. After the project is completed, it will reach an annual output of about 45 inches of hydropower aluminum.

At present, the company’s polycarbonate production capacity reaches 140 mg / year, anode carbon production capacity is 60 g / year, electrolytic aluminum production capacity is 170 g / year, and aluminum alloy and aluminum processing capacity exceeds 80 g / year.

Along with the company’s Zhaotong, Heqing, Wenshan Hydropower Aluminum Projects and Yunnan Aluminum Xinxin 60 tons / year carbon second-phase project gradually put into production, the company’s electrolytic aluminum production capacity will exceed 300 tons / year, anode carbon production capacity exceeds 80 per day / aluminumAlloy and aluminum processing capacity exceeds 100 per second per year.

In addition, through the completion of the alumina construction project replaced by Wenshan 80, the output of self-produced alumina has been increased; through aluminum foil, 3.

5 The construction of projects such as probe battery foil and aluminum welding materials has also enhanced the added value and profitability of the product.


Investment suggestion: After the aluminum downstream enters the peak construction season, aluminum demand is picking up, and continued destocking to support aluminum prices.The reversal of the supply-demand relationship in the aluminum industry chain shifted the profit distribution of the 2019Q2 industry chain from the aluminum oxide aluminum end to the electrolytic aluminum end, and the profitability of the electrolytic aluminum industry is gradually being restored.

As a leading company in the electrolytic aluminum industry, the company has obvious advantages in relying on hydropower costs, and its performance is even more profound when the industry’s profits are restored.

We expect the company’s EPS to be zero in 2019-2020.


24 yuan, corresponding to the PE of 2019-2020 is 29x / 22x, given a “recommended” rating.


Risk warnings 1) The price of aluminum has fallen sharply; 2) The downstream demand for aluminum has fallen short of expectations; 3) The new projects have been put into operation less than expected.