HTSC·2025-04-25 02:05Investment Rating - The report maintains a "Buy" rating for the company [1][4][6] Core Views - The company reported Q1 2025 revenue of 55.784 billion RMB, a year-on-year increase of 13.95% but a quarter-on-quarter decrease of 11.86%. The net profit attributable to shareholders was 3.538 billion RMB, up 58.78% year-on-year and up 4.56% quarter-on-quarter. High aluminum prices are expected to support stable company performance [1][4] - Despite a decline in alumina prices impacting profitability, the company managed to maintain a gross margin of 15.86% in Q1 2025, which is an increase of 0.52 percentage points year-on-year but a decrease of 1.33 percentage points quarter-on-quarter. The average price of electrolytic aluminum was 20,400 RMB per ton, up 7.28% year-on-year but down 0.47% quarter-on-quarter [2][3] - The report anticipates that electrolytic aluminum profits will remain high, with the company positioned as a leading integrated player in the aluminum industry, which should help it navigate through market cycles [3][4] Summary by Sections Financial Performance - Q1 2025 revenue was 55.784 billion RMB, with a year-on-year growth of 13.95% and a quarter-on-quarter decline of 11.86%. The net profit attributable to shareholders was 3.538 billion RMB, reflecting a year-on-year increase of 58.78% and a quarter-on-quarter increase of 4.56% [1] - The gross margin for Q1 2025 was 15.86%, showing a year-on-year increase of 0.52 percentage points but a quarter-on-quarter decrease of 1.33 percentage points [2] Price and Demand Outlook - The average price of electrolytic aluminum in Q1 2025 was 20,400 RMB per ton, which is a 7.28% increase year-on-year but a 0.47% decrease quarter-on-quarter. The average price of alumina was 3,833 RMB per ton, up 15.16% year-on-year but down 28.09% quarter-on-quarter [2][3] - The report notes that while demand for electrolytic aluminum may weaken in the second and third quarters of 2025, limited supply growth is expected to support high aluminum prices [3] Profit Forecast and Valuation - The report projects net profits for 2025-2027 to be 12.447 billion RMB, 13.867 billion RMB, and 15.080 billion RMB respectively, with adjustments reflecting a decrease of 15.43%, 11.32%, and 19.00% from previous estimates [4][10] - The target price for the company is set at 7.30 RMB, based on a 10x PE ratio for 2025, while the target price for H shares is 4.62 HKD [4][6]