TIANSHAN ALUMINUM(SZ:002532) Huafu Securities·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for Tianshan Aluminum with a target price of 9.06 CNY, indicating an expected upside of over 20% in the next six months [5][18]. Core Insights - The company's 2023 annual report shows a revenue of 28.975 billion CNY, down 12.2% year-on-year, and a net profit of 2.205 billion CNY, down 16.8% year-on-year. The fourth quarter of 2023 saw revenues of 6.63 billion CNY, a decrease of 12.1% quarter-on-quarter, and a net profit of 570 million CNY, down 8.1% quarter-on-quarter [3][4]. - In 2023, the decline in aluminum prices and limited sales of high-purity aluminum led to a decrease in net profit by 4.5 billion CNY year-on-year. However, the production of alumina increased by 37.6% to 2.119 million tons, and sales rose by 60.3% to 1.712 million tons [3][4]. - For 2024, the company expects both volume and price increases, projecting alumina production of 2.35 million tons and electrolytic aluminum production of 1.16 million tons. The average price for alumina is anticipated to rise to 3,300 CNY per ton, and electrolytic aluminum to 20,000 CNY per ton [3][4]. Summary by Sections Financial Performance - In 2023, Tianshan Aluminum reported a revenue of 28.975 billion CNY and a net profit of 2.205 billion CNY. The expected revenue for 2024 is projected to be 32.641 billion CNY, with a net profit of 3.833 billion CNY, reflecting a significant recovery [4][11]. - The earnings per share (EPS) for 2023 was 0.47 CNY, with projections of 0.82 CNY for 2024 and 0.99 CNY for 2025 [4][11]. Production and Pricing Outlook - The report highlights a significant increase in alumina production and sales, with alumina production expected to reach 2.35 million tons in 2024. The average price for alumina is projected to increase to 3,300 CNY per ton [3][4]. - The company is also expanding its overseas operations, including a 15.56 billion USD investment in Indonesia for a 2 million ton alumina production line, which is currently undergoing environmental assessments [3][4]. Profitability Forecast - The report forecasts net profits of 3.8 billion CNY in 2024, 4.619 billion CNY in 2025, and 5.128 billion CNY in 2026, reflecting a strong recovery trajectory [3][4][11].