SHENHUO COAL&POWER(000933) 华创证券·2024-10-22 05:07Investment Rating - The report maintains a "Recommend" rating for Shenhuo Co Ltd (000933) with a target price of 23.46 RMB [1][2] Core Views - Shenhuo's Q3 2024 performance was impacted by declining coal prices and rising alumina prices, leading to a 13.75% YoY decrease in net profit attributable to the parent company [1] - The company's Q3 revenue reached 10.093 billion RMB, a 6.02% YoY increase, while net profit attributable to the parent company was 1.254 billion RMB, down 8% YoY [1] - Shenhuo's subsidiary, Shenhuo New Materials, is planning a spin-off IPO to enhance its aluminum processing business layout [1] - The company announced a mid-term dividend distribution of 0.3 RMB per share, totaling 675 million RMB, representing 19.07% of the net profit attributable to the parent company for the first three quarters of 2024 [1] Financial Performance - In Q3 2024, Shenhuo's sales expenses, management expenses, R&D expenses, and financial expenses totaled 530 million RMB, a 30% YoY increase but a 13% QoQ decrease [1] - The company's financial expenses in Q3 were -3 million RMB, a significant reduction of 137 million RMB QoQ due to lower capital usage costs [1] - Shenhuo's operating income for the first three quarters of 2024 was 28.314 billion RMB, a 1.1% YoY decrease, while net profit attributable to the parent company was 3.538 billion RMB, down 13.75% YoY [1] Industry and Market Analysis - Domestic electrolytic aluminum prices averaged 19,562 RMB/ton in Q3 2024, a 3.8% YoY increase but a 4.7% QoQ decrease [1] - Alumina prices averaged 3,917 RMB/ton in Q3 2024, a 34.3% YoY increase and a 7.4% QoQ increase [1] - Coal prices in Yongcheng and Pingdingshan showed significant YoY declines, with anthracite coal prices down 15% YoY and 9% QoQ [1] Future Projections - The report forecasts Shenhuo's net profit attributable to the parent company for 2024-2026 to be 4.64 billion RMB, 5.86 billion RMB, and 6.72 billion RMB respectively, representing YoY changes of -21.5%, +26.5%, and +14.6% [1] - The company's revenue is expected to grow at rates of 8.5%, 5.2%, and 3.8% for 2024-2026 respectively [3] - EPS projections for 2024-2026 are 2.06 RMB, 2.61 RMB, and 2.99 RMB respectively [3] Business Development - Shenhuo New Materials' second phase project, with an annual capacity of 60,000 tons of new energy power battery materials, was fully operational by the end of August 2024 [1] - The company's aluminum processing business is expected to contribute significantly to future performance, with advanced equipment and a focus on high-precision electronic electrode aluminum foil [1]