TIANSHAN ALUMINUM(002532) 民生证券·2024-10-26 08:00Investment Rating - The report maintains a "Recommend" rating for Tianshan Aluminum (002532 SZ) [1][3] Core Views - Tianshan Aluminum achieved revenue of RMB 20 8 billion in the first three quarters of 2024, up 6 9% YoY, with net profit attributable to shareholders of RMB 3 08 billion, up 88 4% YoY [1] - In Q3 2024, revenue was RMB 7 01 billion, down 7 1% YoY, while net profit attributable to shareholders was RMB 1 01 billion, up 63 5% YoY but down 25 4% QoQ [1] - The company's integrated layout is complete, with self-sufficiency in prebaked anodes and alumina, and 80%-90% self-sufficiency in electricity [1] - The company has a significant cost advantage due to low energy prices in Xinjiang, where its electrolytic aluminum capacity is located [1] - Strategic layout includes 2 million tons of alumina capacity in Indonesia and securing bauxite resources in Guinea [1] Financial Performance - For 2024-2026, the company is expected to achieve net profits attributable to shareholders of RMB 3 893 billion, RMB 4 485 billion, and RMB 4 937 billion, respectively, with corresponding P/E ratios of 10x, 9x, and 8x [1] - The company's revenue is projected to grow from RMB 28 975 billion in 2023 to RMB 33 590 billion in 2026, with a net profit margin increasing from 7 61% to 14 71% over the same period [4] - ROE is expected to improve from 9 15% in 2023 to 14 83% in 2026 [4] Production and Operations - In Q3 2024, the company's electrolytic aluminum and alumina production was nearly full, with electrolytic aluminum output of around 290,000 tons and alumina output of around 600,000 tons [1] - The company's 2024 production targets include 1 16 million tons of primary aluminum, 13 billion kWh of power generation, 2 35 million tons of alumina, and 550,000 tons of prebaked anodes [1] - Alumina gross profit increased in Q3 2024, while electrolytic aluminum gross profit declined due to a RMB 975/ton drop in aluminum prices [1] Strategic Developments - The company has completed the acquisition of three bauxite mines in Indonesia and plans to invest USD 1 556 billion to build a 2 million-ton alumina production line [1] - In late 2023, the company acquired 100% of Galicomininglimited, indirectly obtaining 50% of Elite Mining Guinea S A and exclusive purchase rights for bauxite, with planned annual production capacity of 5-6 million tons [1] Valuation and Dividends - The company proposed a cash dividend of RMB 2 00 per 10 shares, totaling RMB 923 million, accounting for 29 92% of the net profit attributable to shareholders in the first nine months of 2024 [1] - The company's EV/EBITDA is expected to decrease from 10 28x in 2023 to 5 46x in 2026 [5]