Report Investment Rating No information regarding the industry investment rating is provided in the report. Core Viewpoints - Casting aluminum alloy is an important part of China's non - ferrous metal industry. With the ceiling of primary aluminum production capacity reached, the supply increment of domestic aluminum will rely on recycled aluminum and imports. Recycled aluminum is a key direction for the green transformation of China's non - ferrous metals due to its low carbon emissions [14][31]. - The launch of casting aluminum alloy futures and options will provide price signals, promote the green and low - carbon development of the aluminum industry, and help the national "dual carbon" strategy. It will also offer risk management tools for physical enterprises [65]. - The future development prospects of recycled aluminum are promising. With the arrival of the peak of scrap aluminum scrapping and policy support, the supply of recycled aluminum raw materials will be alleviated, and the output will gradually increase towards the targets of 1150000 tons in 2025 and 1800000 tons in 2030 [31]. Summary by Directory 1. Casting Aluminum Alloy Industry Introduction - Casting aluminum alloy is a type of aluminum alloy, and the upcoming casting aluminum alloy futures contract on the Shanghai Futures Exchange is for recycled casting aluminum alloy, with the delivery targets being 383Y.3 (GB/T8377 - 2016) and AD12.1 (JIS H 2118 - 2006), commonly known as ADC12 [7]. - The upstream of the recycled casting aluminum alloy industry chain is scrap aluminum recycling enterprises, and the downstream is mainly used in the automotive and other fields. ADC12 is the core grade in recycled casting aluminum alloy, with high strength, good pressure resistance, and low thermal brittleness, suitable for many automotive parts [9]. - Compared with primary aluminum, recycled aluminum has low carbon emissions and is in line with the "dual carbon" strategy. In the future, the domestic aluminum supply increment will rely on recycled aluminum and imports [14]. 2. China's Scrap Aluminum Supply Situation - Domestic scrap aluminum supply is mainly from domestic recycling, with imported scrap as a supplement. Domestic recycling includes new scrap (from the production process) and old scrap (from post - consumer products). The supply of old scrap is increasing as more scrap aluminum enters the recycling cycle [18][20]. - China has adjusted scrap aluminum import policies several times in recent years. In 2024, the scrap aluminum import volume reached 178500 tons, the highest since 2018, with a relatively dispersed import source [26][27]. - Overall, China's scrap aluminum supply has been tight in recent years, but with the arrival of the high - growth period of aluminum scrapping and policy adjustments, the supply of domestic old scrap will increase, supporting the rapid development of recycled aluminum [30]. 3. Casting Aluminum Alloy Supply and Demand Status - In 2024, the output of recycled casting aluminum alloy in China was 705000 tons, with a low capacity utilization rate of 50 - 60%. The industry is mainly composed of small and medium - sized private enterprises, with low market concentration [31][39][40]. - Since 2020, China has changed from a net exporter to a net importer of aluminum alloy ingots. In 2024, the import volume of aluminum alloy was 121200 tons, mainly from Malaysia and Thailand [42]. - The demand for casting aluminum alloy is mainly from the automotive industry. Although the proportion of recycled aluminum used in new energy vehicles is lower than that in fuel vehicles, the development of low - carbon aluminum alloy materials will expand the market space for recycled materials [48][53]. 4. Casting Aluminum Alloy Price Operation Characteristics - The price of ADC12 generally follows the trend of primary aluminum, but there are stage differences. In 2024, the industry average profit was - 25 yuan/ton, and the launch of futures can help hedge price risks [60]. - The price difference between different regions of ADC12 is small, while the price difference between different brands is obvious. The basis may fluctuate greatly at the initial stage of futures listing, providing arbitrage opportunities [61]. - There is a lack of high - frequency data on ADC12, and the social inventory is low and has little practical value for judging supply and demand [61]. 5. Casting Aluminum Alloy Futures Contract Text (Listing Version) - The trading unit of the casting aluminum alloy futures contract is 10 tons/hand, the minimum price change is 5 yuan/ton, and the daily price limit is ±3% of the previous trading day's settlement price. The contract months are from January to December [67]. - The delivery unit is 30 tons, and the delivery grade is casting aluminum alloy ingots that meet specific quality requirements, including chemical composition, pinhole degree, slag inclusion, etc. [68]. 6. Casting Aluminum Alloy Futures Business Rules (Listing Version) - It includes trading rules, delivery rules, fee standards, invoice processes, and risk management systems. For example, the minimum trading margin is 5% of the contract value, and the margin increases at different stages of the contract [72][85]. - The delivery process involves multiple aspects such as product quality inspection, packaging requirements, and document requirements. The delivery fee is 2 yuan/ton, and it is temporarily exempted until December 31, 2025 (except for high - frequency traders) [74][80]. - In terms of invoice processes, the seller needs to issue a VAT special invoice to the buyer, and there are corresponding regulations on the time of invoice issuance and the handling of late - issued invoices [81].

Industry Outlook - The Chinese government has introduced several macro development plans and industrial policies, such as the 14th Five-Year Plan and the New Energy Vehicle Industry Development Plan (2021-2035), which encourage innovation and green development in new materials and new energy sectors [1] - The Ministry of Industry and Information Technology has issued the "Aluminum Industry High-Quality Development Implementation Plan (2025-2027)", aiming for a 3%-5% increase in domestic aluminum resources and over 15 million tons of recycled aluminum production by 2027 [2] Company Performance - In Q1 2025, the company achieved a revenue of CNY 347,589.43 million, representing a year-on-year growth of 19.83%, and a net profit attributable to shareholders of CNY 11,662.67 million, with a year-on-year increase of 125.50% [4][6] - For the full year 2024, the company reported a revenue of CNY 1,397,651.34 million, reflecting a growth of 17.01% compared to the previous year [7] Competitive Advantages - The company has established a comprehensive core technology system in the recycled aluminum sector, with five key advantages: intelligent sorting pre-treatment system, low-carbon combustion system, waste heat recovery, precise alloy composition control, and a digital quality control platform [3] Future Growth Strategies - The company plans to drive future profitability through a dual strategy of "recycled casting aluminum alloy + recycled deformed aluminum alloy" and will focus on optimizing sales and procurement strategies, increasing capacity utilization, and reducing costs [5][10] - The company aims to expand its production capacity in the casting and deformed aluminum alloy sectors, leveraging domestic capital markets to seize industry integration opportunities [9][10] Financial Management - The company is addressing rising debt levels, which increased from 55% to 75% over three years, by exploring various financing methods and controlling operational funding needs [8] - The company has a current production capacity of 1.05 million tons, with a utilization rate of approximately 78% in 2024, exceeding the industry average [13]

Group 1 - The company reported a revenue of 3.476 billion yuan for Q1 2025, representing a year-on-year growth of 19.83% [1] - The net profit attributable to shareholders reached 117 million yuan, with a significant year-on-year increase of 125.5%, resulting in a basic earnings per share of 0.17 yuan [1] - The company has increased its production capacity in Anhui, ensuring strong supply and expanding its main business [1] Group 2 - As a leading player in the recycled aluminum industry, the company has established a complete aluminum processing industrial chain and is implementing a dual-driven strategy of "recycled casting aluminum alloy + recycled deformed aluminum alloy" [1] - The company has a production capacity of 1.05 million tons across four major production bases, continuously expanding its market share and profitability in the casting aluminum alloy sector [1] - The company is actively entering the deformed aluminum market through the acquisition of Chongqing Aobo, which has a production capacity of 50,000 tons of aluminum plates and strips [1][2] Group 3 - The company's products are primarily used in the automotive, motorcycle, machinery, communication equipment, electronic appliances, and hardware lighting industries, with over 53% of its products now applied in the automotive sector [2] - The trend towards lightweight vehicles in the context of carbon neutrality is expected to increase the demand for aluminum as a substitute for steel and iron, benefiting the company's product applications in the automotive industry [2] - The company aims to leverage the steady development of its recycled aluminum business and utilize domestic capital market platforms to accelerate capacity release in the casting and deformed aluminum alloy sectors [2]