NANSHAN ALUMINIUM(SH:600219) Huachuang Securities·2024-07-11 11:01Investment Rating - The investment rating for Nanshan Aluminum is "Recommended" with a target price of 4.46 CNY, indicating a potential upside of 10% from the current price [2][3]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 1.971 to 2.151 billion CNY for the first half of 2024, representing a year-on-year growth of 50.11% to 63.82% [2]. - The increase in alumina prices and the release of production capacity from the Indonesian alumina project have significantly boosted the company's profits [2]. - The domestic self-sufficiency in alumina has led to an expansion of profits in the electrolytic aluminum segment [2]. - The outlook for high prices in alumina and electrolytic aluminum is positive due to various supply constraints [2]. Financial Summary - Total revenue for 2023 is reported at 28.844 billion CNY, with projections of 33.201 billion CNY for 2024, reflecting a year-on-year growth of 15.1% [3]. - The net profit attributable to shareholders is expected to rise from 3.474 billion CNY in 2023 to 4.349 billion CNY in 2024, marking a growth of 25.2% [3]. - Earnings per share (EPS) is projected to increase from 0.30 CNY in 2023 to 0.37 CNY in 2024 [3]. - The price-to-earnings (P/E) ratio is expected to decrease from 13 in 2023 to 11 in 2024, indicating a more favorable valuation [3]. Production and Cost Insights - The company’s alumina production capacity is primarily located in Shandong and Indonesia, with a total output of 2 million tons from the Indonesian project fully released in the first half of 2024 [2]. - The average price of first-grade alumina in Shandong for Q2 2024 was 3,633 CNY per ton, up 26.5% year-on-year [2]. - The cost of prebaked anodes and thermal coal has decreased in the first half of 2024, contributing to improved profit margins in the electrolytic aluminum segment [2].