According to Baichuan data, the procurement benchmark price of an aluminum factory in Shandong in October 2022 increased by 180 yuan/ton month-on-month in September, with a spot price of 7180 yuan/ton, and the price of acceptance was 7215 yuan/ton. We believe that the rise in spot prices is mainly due to the high rise in petroleum coke prices and the increase in transportation costs, and the increase in costs strengthens the price support for pre-baked anodes.
Downstream demand, although electrolytic aluminum plants are under pressure to start construction in some areas due to power restrictions, the overall operating rate remains high and downstream demand is good. The price of pre-baked anode bottomed out and rebounded in line with expectations, and it is expected that the price will start to rise significantly in October. It is estimated that the current net profit per ton of the pre-baked anode industry is about 430 yuan/ton, an increase of about 30 yuan/ton from mid-September. The company's steady-state profit is about 300 yuan/ton higher than the industry, and its profitability is outstanding.
Yunnan electrolytic aluminum plant production cuts will not affect the company's order demand. Currently, Yunnan's electrolytic aluminum production capacity is 6 million tons, corresponding to the demand for pre-baked anodes of about 3 million tons; Yunnan's pre-baked anode production capacity is 1.4 million tons, of which Yunnan aluminum is 800,000 tons and Cotong 600,000 tons. The remaining 1.6 million tons need to be purchased from outside. The reduction of production will first stop this part of the purchase demand, which will not affect Cotong for the time being. In terms of negative electrodes, Xinyuan Phase I 40,000 tons of graphitization will be powered on trial production in the near future. It is expected that the negative electrode production capacity will be 15,000 tons by the end of 22nd and the graphitization capacity will be 80,000 tons, and the consolidation will begin in November. The company is expected to have an annual revenue of 18.7 billion/30.4 billion in 22/23; net profit attributable to shareholders of 1.56 billion/2.15 billion; the corresponding PE is 8/6X, which is significantly underestimated, and the key recommendations are maintained!
