Henan Zhongfu Industrial (SH:600595) Zhongyuan Securities·2025-09-17 10:38Investment Rating - The report assigns an "Increase" rating for the company, indicating a potential price increase of 5% to 15% relative to the CSI 300 index over the next six months [23]. Core Views - The company has shown significant profit growth due to a decrease in raw material prices and an increase in aluminum prices, with a net profit of 707 million yuan in the first half of 2025, representing a year-on-year increase of 59.55% [6][9]. - The improvement in performance is attributed to enhanced profitability in aluminum deep processing and increased electrolytic aluminum capacity, alongside reduced costs from alumina and electricity [9]. - The company completed a 24% equity acquisition in Zhongfu Aluminum, raising its electrolytic aluminum capacity to 750,000 tons per year, and is advancing its green aluminum development strategy [9]. Summary by Sections Financial Performance - In the first half of 2025, the company achieved operating revenue of 10.574 billion yuan, a year-on-year decline of 3.82%, while the net profit attributable to shareholders increased by 59.55% [6]. - The gross profit margin improved to 11.66%, up 1.40 percentage points from the previous year, and the net profit margin rose to 5.93%, an increase of 1.59 percentage points [9]. Cost and Pricing Dynamics - The average alumina price in the first half of 2025 was 3,450.64 yuan per ton, down 1.17% year-on-year, while the electrolytic aluminum price was 20,315.42 yuan per ton, up 2.66% [9]. - The price of thermal coal decreased by 26.81% year-on-year, contributing to cost improvements [9]. Strategic Developments - The company is focusing on green low-carbon transformation, with a new distributed photovoltaic capacity of approximately 21.5 MW added in the first half of 2025, bringing the total to about 77.55 MW [9]. - The proportion of recycled aluminum in deep processing products reached 61%, further reducing the carbon footprint [9]. Shareholder Returns - The company initiated an employee stock ownership plan, with employees purchasing approximately 330 million shares, representing 8.21% of total shares, at an average price of 3.21 yuan per share [9]. - A cash dividend plan was established, aiming to distribute at least 60% of the distributable profits in cash annually from 2025 to 2027, reflecting confidence in future profitability [9]. Earnings Forecast - The company is projected to achieve operating revenues of 24.108 billion yuan, 24.469 billion yuan, and 24.861 billion yuan for 2025, 2026, and 2027, respectively, with net profits of 2.126 billion yuan, 2.232 billion yuan, and 2.390 billion yuan [10].