CHALCO(601600) 国信证券·2024-04-28 01:30Investment Rating - Maintain "Overweight" rating for Chalco (601600 SH) [1][9] Core Views - Chalco's Q1 2024 performance was strong, with net profit attributable to parent company up 63 45% QoQ [1][5] - The significant improvement in performance was mainly due to rising commodity prices [1][5] - Chalco has a complete aluminum industry chain and still has capacity expansion potential despite industry capacity ceiling [1][9] Financial Performance Q1 2024 Results - Revenue: RMB 48 956 billion (-26 14% YoY, +33 52% QoQ) [1][5] - Net profit attributable to parent: RMB 2 230 billion (+23 01% YoY, +63 45% QoQ) [1][5] - Non-GAAP net profit: RMB 2 183 billion (+35 61% YoY, +29 57% QoQ) [1][5] - Gross margin: 15 34% (+6 22% YoY, -5 62% QoQ) [1][6] - Net margin: 8 27% (+3 89% YoY, -0 96% QoQ) [1][6] Production and Sales - Metallurgical alumina output: 4 25 million tons (+6 8% YoY, +1 0% QoQ) [1][8] - Fine alumina output: 0 99 million tons (-10 8% YoY, -54 2% QoQ) [1][8] - Self-produced alumina sales: 1 50 million tons (-9 1% YoY, -0 7% QoQ) [1][8] - Primary aluminum output: 1 78 million tons (+16 3% YoY, -4 3% QoQ) [1][8] - Self-produced primary aluminum sales: 1 76 million tons (+11 4% YoY, -5 4% QoQ) [1][8] - Coal output: 2 88 million tons (+6 7% YoY, -14 3% QoQ) [1][8] Profitability - Primary aluminum unit net profit: ~RMB 1 560/ton [1][8] - Alumina unit net profit: ~RMB 515/ton [1][8] - Both showed significant improvement compared to 2023 [1][8] Cost Control - Sales/management/R&D/financial expense ratios: 0 19%/2 05%/1 17%/1 42% [1][6] - Effective cost control with most expense ratios declining QoQ [1][6] - Debt-to-asset ratio: 51 61% (-1 69% from end of 2023) [1][6] Market Data - Closing price: RMB 7 35 [3] - Total market cap: RMB 126 114 billion [3] - 52-week high/low: RMB 7 73/4 90 [3] - 3-month average daily turnover: RMB 1 133 20 billion [3] Valuation - 2024E PE: 15 2x [9] - 2025E PE: 12 6x [9] - 2026E PE: 11 1x [9] - Current PB: 2 1x [10] Peer Comparison - Chalco's valuation is higher than peers like China Hongqiao (1378 HK) and Yunnan Aluminium (000807 SZ) [10] - Chalco has higher PB ratio compared to peers, reflecting its leading position [10]