3 6 Ke·2024-03-29 10:30Core Viewpoint - China Aluminum (601600.SH) plans to transfer its 6.68% stake in China Copper Resources Co., Ltd. to China Copper for a transaction price of 328 million yuan, which will make China Copper a wholly-owned subsidiary of China Aluminum [1] Group 1: Company Transactions - The stake transfer is an associated transaction as China Copper is a subsidiary of China Aluminum's controlling shareholder [1] - China Aluminum's investment in China Copper Resources dates back to 2015, primarily to acquire bauxite resources, but the focus has shifted to copper, zinc, and lead exploration, providing limited support for bauxite resource acquisition [1] - China Copper Resources has limited bauxite resources and poor profitability, with a debt-to-asset ratio exceeding 70%, resulting in no dividend income for China Aluminum over the years [1] Group 2: Financial Performance - In 2023, China Aluminum reported revenue of 225.07 billion yuan, a decrease of 22.65% year-on-year, while net profit attributable to shareholders was 6.717 billion yuan, an increase of 60.23% [2] - The company’s long-term equity investment in China Copper Resources has decreased from 234 million yuan at the beginning of 2019 to 204 million yuan by the end of 2023, a reduction of 12.83% over five years [1][2] - The increase in net profit is attributed to a focus on core business and a reduction in low-margin trading activities, with production stability and structural optimization contributing to improved efficiency [2] Group 3: Production and Market Dynamics - In 2023, China Aluminum produced 30.42 million tons of bauxite, 16.67 million tons of metallurgical-grade alumina, and 6.79 million tons of primary aluminum, with coal production reaching a historical high of 13.05 million tons, up 21.51% year-on-year [2] - The trading business, with a low gross margin of 1.41%, generated the highest revenue at 185.48 billion yuan, while energy products, with a gross margin of 39.10%, had the lowest revenue at 9.256 billion yuan [2] - The third quarter of 2023 was the most profitable for China Aluminum, with a non-recurring net profit of 2.046 billion yuan, accounting for 30.93% of the annual total [2] Group 4: Aluminum Price Trends - In the third quarter of 2023, aluminum prices rose from around 18,500 yuan/ton to approximately 19,850 yuan/ton, significantly boosting electrolytic aluminum profits [3] - The increase in aluminum prices is attributed to improved supply-demand dynamics, with social inventory decreasing and expectations of production cuts due to power constraints in certain regions [3][4] - Analysts predict that aluminum prices will maintain a strong oscillation, with the mainstream price range for 2024 expected to be between 18,400 and 22,000 yuan/ton, influenced by demand and supply changes [4]