TIANSHAN ALUMINUM(SZ:002532) Haitong Securities·2024-03-17 16:00Investment Rating - The report assigns an "Outperform" rating for the company [2][6]. Core Views - The company has been engaged in the aluminum industry for thirty years, continuously optimizing its capacity layout and resource allocation, forming an integrated industrial chain from bauxite, alumina to electrolytic aluminum, high-purity aluminum, and battery aluminum foil [6][8]. - The company benefits from significant cost advantages due to its location in Xinjiang, where coal resources are abundant and cheaper than inland prices, with 80%-90% of its electricity being self-supplied [6][8]. - The company is expanding its overseas resource layout by acquiring low-cost bauxite resources in Indonesia and plans to invest $1.556 billion to build a 2 million-ton alumina production line [6][8]. - The company is also entering the new energy sector with a battery aluminum foil project, which is progressing smoothly, with several production lines already installed and customer certifications underway [6][8]. Summary by Sections Investment Rating - The company is rated "Outperform" with a target price range of 7.15 to 8.45 CNY per share based on a PE valuation of 11-13 times for 2024 [6][10]. Financial Performance - The company’s revenue is projected to grow from 33,008 million CNY in 2022 to 36,877 million CNY in 2025, with a compound annual growth rate (CAGR) of approximately 5.3% [7][12]. - Net profit is expected to recover from 2,650 million CNY in 2022 to 3,658 million CNY in 2025, reflecting a significant growth trajectory [7][12]. - The earnings per share (EPS) are forecasted to increase from 0.57 CNY in 2022 to 0.79 CNY in 2025 [7][12]. Production Capacity and Cost Assumptions - The company has established an annual production capacity of 1.2 million tons of electrolytic aluminum, 600,000 tons of prebaked anodes, 2.5 million tons of alumina, and 60,000 tons of high-purity aluminum [6][8]. - The average selling price of self-produced aluminum ingots is expected to be 16,397 CNY per ton in 2023, increasing to 17,396 CNY per ton by 2025 [9][11]. Market Position and Competitive Advantage - The company has a complete self-sufficient supply chain for key raw materials, which enhances its competitive edge in the market [6][8]. - The strategic location of its production facilities allows the company to maintain lower production costs compared to competitors [6][8].