Yunnan Aluminum (000807): Turning losses into profits
The company foresees an estimated profit of about 500 million in 2019, which will turn around losses.
Looking forward to 2020, the price of raw materials is expected to remain weak. With the completion of the drive, the aluminum price center will continue to maintain a high level, and the performance improvement will continue.
Maintain overweight rating.
The company’s 2019 performance forecast is in line with expectations. Looking ahead to 2020, the completion of the aluminum price center will promote the maintenance of high prices, combined with the weakening of the cost of raw material prices and the growth of the company’s production and sales, and the improvement of performance will continue.
According to the performance forecast, the EPS for 2019 is raised to 0.
16 yuan (previously 0.
12 yuan), maintaining EPS0 in 2020/2021.
61 yuan, maintaining a target price of 6.
5 yuan to maintain the overweight level.
Obviously turned around and performed in line with expectations.
The company forecasts a profit of about 500 million (+ 134%) in 2019, which significantly distort the loss (about 14 in 2018).
700 million), performance in line with expectations.
The expected growth in performance is due to increased production and sales and lower costs. 1) The report expects that projects such as Heqing and Zhaotong will be put into operation one after another. The distribution of primary aluminum production will rise, with an expected output of 180-190 mm, multiple + 10% -16%.The average price of alumina is about 2716 yuan / ton (including tax), which has continued to decrease by about 9%. The overlapping companies’ aluminum ore self-sufficiency 杭州夜网论坛 rate has improved and the costs of logistics and other expenses have been reduced. Gradually, aluminum production costs have improved and declined.
Note: The spot aluminum price of the Yangtze River in 2019 is about 13,940 yuan / ton, with a slight deviation of about -2% per year.
In 2020, the price of raw materials is expected to weaken and the aluminum price hub is expected to maintain a high level, and performance improvement will continue.
Looking forward to 2020, the excess of raw materials: alumina and anode surplus are still obvious, and the price weakness is expected to continue; while the aluminum price: the current social inventory is still low, and the subsequent completion of the promotion is trying to promote a noticeable recovery in demand.In addition, there is a certain amount of uncertainty in new production and resumption production capacity, and the aluminum price hub promotes maintaining a high level.
The combined company’s production and sales increased (Zhaotong Phase 2, Wenshan and other projects were put into production), and performance improved to promote continuation.
Catalyst: The accumulation of aluminum social inventories is less than expected, and the upward risk of aluminum prices prompts: The epidemic has caused a significant decline in aluminum demand, and the shutdown of production capacity has exceeded expectations.