XJJW(SH:600888) Shenwan Hongyuan Securities·2025-09-27 09:15Investment Rating - The report initiates coverage with a rating of "Buy" for the company [8][9]. Core Insights - The company has a complete aluminum electronic materials industry chain, covering energy, electrolytic aluminum, high-purity aluminum, electronic aluminum foil, and electrode foil. The integration allows for stable raw material quality and cost control [8][19]. - The new alumina project, with an annual capacity of 2.4 million tons, is expected to enhance profits significantly upon its launch in the first half of 2026. The project's location near a deep-water port reduces transportation costs for imported bauxite [8][9]. - The domestic electrolytic aluminum capacity is nearing its ceiling, leading to a supply-demand imbalance that is likely to support aluminum prices in the long term [8][67]. Financial Data and Profit Forecast - Total revenue is projected to reach 73.21 billion yuan in 2024, with a year-on-year growth of 12.0%. The net profit attributable to shareholders is expected to be 12.03 billion yuan, down 22.9% year-on-year [2]. - For 2025, the company anticipates a total revenue of 77.77 billion yuan, with a net profit of 8.01 billion yuan, reflecting a decline of 33.4% year-on-year [2][9]. - The earnings per share (EPS) for 2025 is estimated at 0.57 yuan, with a projected price-to-earnings (PE) ratio of 14 times [2][9]. Company Overview - The company, Xinjiang Zhonghe, specializes in aluminum-based new materials and has a fully integrated industry chain. It has an electrolytic aluminum production capacity of 180,000 tons and a high-purity aluminum capacity of 78,000 tons [19]. - The company has invested in a 2×150 MW cogeneration power plant, achieving a power self-sufficiency rate of approximately 50% [19]. Industry Analysis - The alumina market is currently experiencing a surplus, but long-term uncertainties in bauxite supply may stabilize prices [47][58]. - The electrolytic aluminum industry is expected to maintain high profitability due to the constraints on new capacity and increasing demand from sectors like electric vehicles [67][74].