U.S. Securities: Direct Power Purchase Will Make Yun Aluminum “Comprehensive Advantage”


This time being included in the first batch of direct purchase pilot companies, Yun Aluminum (000807) will be a major beneficiary. Comparing with counterparts, the higher power costs and seasonal power supply bottlenecks have always been the “soft underbelly” of Yun Aluminum, making it difficult for its obvious advantages in operation and management, technical processes, resources protection, and energy saving and environmental protection to be exerted. Direct purchase of electricity will enable it to "advantage change advantage."

It is more optimistic to estimate that after the implementation of direct purchase of electricity, the company's electricity price is expected to drop by 0.05 yuan/kWh, the cost of tons of aluminum will decrease by approximately 580 yuan (excluding tax), corresponding to an increase in EPS of existing capacity by approximately 0.188 yuan/share.

At the same time, as the company's aluminum processing and alumina projects are gradually put into production, as the aluminum industry company, its "Y" type industrial chain is basically completed and the business model will be in line with international leading companies such as Alcoa. By then, the stability and predictability of the company will be greatly improved, and its anti-risk ability and profitability will be significantly enhanced.

After DCF and "PB + resource value" valuation, we believe that 8.12-8.59 yuan / share is the company's reasonable value range, optimistic about the company's long-term development prospects, upgrade rating for "overweight."

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