云铝股份-神火股份

Summary of Conference Call on Yun Aluminum and Shenhuo Co. Industry Overview - The non-ferrous metals sector performed poorly in Q4 2023, ranking third from the bottom among Shenwan's first-level industries, with only a 10% increase, while the industrial metals sub-sector rose by 5% and precious metals fell by 8% [3][4] - Market sentiment shifted towards risk aversion after the New Year, favoring large-cap and dividend stocks, which improved the valuation attractiveness of Yun Aluminum and Shenhuo Co. [3][5] Core Insights - The easing of fiscal policies in China and the U.S. is expected to boost domestic demand, benefiting cyclical metals like aluminum, steel, and copper. Aluminum, due to its domestic pricing and tight supply-demand dynamics, is particularly attractive for investment [3][4] - The projected electrolytic aluminum deficit is 210,000 tons in 2024 and will expand to 930,000 tons by 2025, indicating a tightening supply-demand situation [5] - Both Yun Aluminum and Shenhuo Co. have low alumina self-sufficiency rates, which enhances their cost advantages when alumina prices decline. Their operational efficiency allows them to benefit from profit transfers down the supply chain [3][6] Investment Timing and Strategy - The current timing for purchasing shares of Yun Aluminum and Shenhuo Co. is favorable due to declining alumina prices, which will alleviate cost pressures. February is typically a low season, making it a good time to buy [7] - Institutional investors are already positioning themselves in these core stocks, suggesting that early investment is advisable to avoid missing potential gains [7] Beta and Alpha Factors - The beta factors for the aluminum industry include rising aluminum prices and falling alumina prices. The upward trend in aluminum prices is driven by global supply chain shifts and China's supply-side reforms [8] - Yun Aluminum's alpha factors include strong fundamentals, production expansion, and carbon reduction advantages. The company's debt-to-asset ratio has decreased to 26%, with cash on hand reaching 8.2 billion, a 106% year-on-year increase [8][9] - Shenhuo Co. benefits from three beta factors: rising aluminum prices, stabilizing coal prices, and falling alumina prices. Its dual presence in Xinjiang and Yunnan enhances its competitive edge [9] Market Concerns - Concerns regarding alumina price declines leading to lower electrolytic aluminum prices are deemed unnecessary, as the pricing systems for alumina and electrolytic aluminum are relatively independent [10] - The market has underestimated the value of Shenhuo Co.'s coal segment, which provides stable cash flow and high dividends, ensuring relative stability in coal prices [11] - Yun Aluminum is perceived to face competitive pressures in Yunnan's hydropower sector, but improvements in the competitive landscape and stable wind and solar base construction are expected to enhance profitability [12] Financial Projections - Yun Aluminum's projected net profits for 2024-2026 are 4.5 billion, 6.7 billion, and 7.9 billion, respectively, with significant growth in price-to-earnings ratios [12] - Shenhuo Co. is expected to achieve profits of 4.2 billion, 5.4 billion, and 6.2 billion for the same period, with its valuation still significantly below the industry average [12]