TIANSHAN ALUMINUM(SZ:002532) Tianfeng Securities·2025-09-02 10:12Investment Rating - The investment rating for Tianshan Aluminum is "Buy" with a target price not specified [6][17]. Core Views - The company's performance in H1 2025 met expectations, with revenue of 15.328 billion yuan, up 11.2% year-on-year, and a net profit attributable to shareholders of 2.084 billion yuan, up 0.5% year-on-year. The increase in revenue was primarily driven by strong sales of electrolytic aluminum and alumina, although rising bauxite costs limited profit growth [1][2]. - The company is progressing well with its 200,000-ton electrolytic aluminum expansion project, which is expected to fully release capacity in 2026, resulting in a production increase of 21% [4]. - The report anticipates a favorable supply-demand situation for electrolytic aluminum, with potential cost reductions due to the company's integrated layout. The expected net profits for 2025, 2026, and 2027 are projected to be 4.61 billion, 5.97 billion, and 7.14 billion yuan, respectively [4]. Summary by Sections Financial Performance - In H1 2025, the electrolytic aluminum production was 585,400 tons, stable year-on-year, with external sales up approximately 2%. The average selling price for electrolytic aluminum was about 20,250 yuan per ton, an increase of 2.8% year-on-year, while production costs rose by about 2% [2]. - Alumina production reached 1.1999 million tons, up 9.76% year-on-year, with external sales increasing by about 7%. The average selling price for alumina was approximately 3,700 yuan per ton, up 6% year-on-year, but production costs increased by 18% due to rising bauxite procurement costs [2]. - The company reported a financial expense of 250 million yuan, down 32.6% year-on-year, mainly due to a decrease in interest expenses from lower interest-bearing liabilities [3]. Expansion Projects - The company announced plans to upgrade 1.4 million tons of electrolytic aluminum capacity with a focus on green and low-carbon efficiency, with the 200,000-ton surplus capacity project expected to start construction soon. The first batch of aluminum ingots is anticipated to be produced by December 2025 [4]. Future Projections - The report adjusts the price assumptions for aluminum and alumina, projecting net profits of 4.61 billion, 5.97 billion, and 7.14 billion yuan for 2025, 2026, and 2027, respectively, with corresponding P/E ratios of 10.6, 8.2, and 6.9 [4][5].