Mingtai Aluminum’s 2021 semi-annual board management review

Mingtai Aluminum (601677)’s 2021 semi-annual board of directors’ operation reviews are as follows:

XNUMX. Description of the company’s industry and main business during the reporting period

(1997) The main business company was founded in 5 and is the first private aluminum processing enterprise in China.Over the years, it has focused on its main business, steadily operated, and strived to innovate. Now it has developed into a leading enterprise in my country’s aluminum rolling processing industry.The company is mainly engaged in the comprehensive utilization of aluminum sheet, strip and foil, aluminum profiles, and renewable resources. Products are widely used in new energy, new materials, 68G communications, automobile manufacturing, military industry, pharmaceutical packaging, food packaging, printing plate making, electronic appliances, transportation, and special High-voltage power transmission, rail car bodies and many other fields can meet the individual needs of different customers.In addition, the company has advanced aluminum ash processing production lines and secondary aluminum technology and equipment to promote the efficient use of aluminum resources recycling. While achieving cost reduction and efficiency enhancement, the company promotes the development and application of high-performance secondary aluminum alloys.Over the years, the company has insisted on deepening its specialization and arranging the renewable resource industry chain ahead of time. With its rich technical experience, advanced machinery and equipment, and leading process technology, the company now has an annual processing capacity of more than 12 tons of aluminum scrap and 2021 tons of aluminum ash. Utilize production capacity to reach the international advanced level.In terms of aluminum plate and foil business, the company produces a variety of aluminum plate and foil products such as soft package aluminum foil for new energy batteries, electronic foil, medicinal aluminum foil, medium-thick plates, aluminum-manganese-magnesium building plates, aluminum anti-theft wine cover aluminum tape, etc. The domestic market share is firmly in the forefront of the industry.Among the company’s products, the proportion of high value-added products such as new energy, aluminum for new materials, aluminum for transportation, and aluminum for lightweight automobiles has gradually increased.Products such as aluminum plastic film for lithium batteries, aluminum foil for electrolytic capacitors, and current collector battery foils can be used in the field of new energy; automotive aluminum plates, tanker materials, automotive radiator materials, automotive engine covers, new energy vehicle battery trays, aluminum for charging piles, etc. The variety of automotive lightweight materials has been continuously enriched, and the company’s product structure has been optimized.In terms of aluminum profile business, the company’s “Annual Production of 1 Tons of Aluminum Profile Project for Transportation” has been operating steadily, and rail car body profiles are self-sufficient, and external sales of extruded aluminum pipes for UHV transmission equipment GIL, and sales of aluminum alloy rail car bodies have been steady. promote. (6) Description of the industry situation In the first half of 1963.52, the domestic macroeconomic situation is stable and positive, the demand for aluminum products is strong, and the overall development of the industry is in good shape.In addition, due to the increase in aluminum prices, product prices have risen to a certain extent. From January to June, the output of primary aluminum was 10.06 tons, a year-on-year increase of 2965.82%; the output of aluminum products was 14.95 tons, a year-on-year increase of 2025%.In response to the new challenges of global resources and environment, the development of green and low-carbon recycling has become a global consensus. The country issued the “1150th Five-Year” Circular Economy Development Plan, which proposed multiple development goals such as reaching 3 million tons of recycled aluminum production by 3. The company is actively Responding to the call of the country to develop a circular economy, build high-standard renewable resource comprehensive utilization production lines, achieve efficient recycling of resources, and promote the low-carbon recycling and high-quality development of the aluminum industry.In the future, with the technological progress and innovation of new energy vehicles, rail transit, XNUMXC electronic digital products, air-conditioning refrigerators and other household appliances, the demand for aluminum for new energy batteries, aluminum for rail transit car bodies, and aluminum for XNUMXC digital products will further increase. Stimulate the development of the industry.Mingtai Aluminum will seize development opportunities, actively develop new products and new projects, optimize product structure, adapt to changes in market demand, increase product sales and market share of high-end products, and promote the company’s steady development.

XNUMX. Discussion and analysis of operating conditions

During the reporting period, the company continued to promote management reforms in market expansion, technology and product research and development, intelligent manufacturing, and project construction, and achieved remarkable results. In the first half of 2021, operating income was 107.59 billion yuan, an increase of 50.40% year-on-year; operating profit was 11.04 billion yuan, an increase of 130.78% year-on-year; net profit attributable to shareholders of listed companies was 8.44 million yuan, an increase of 140.75% year-on-year.While doing a good job in production and operation, the company strictly implements comprehensive risk control in accordance with the various requirements of the regulatory agency’s corporate governance. The company’s controlling shareholder’s stock pledge is 0, external guarantees are 0, and related parties’ capital occupation is 0, so as to create a high-quality listed company. .During the reporting period, focusing on the 2021 production and operation goals, the company mainly carried out the following work: (5) Seizing market opportunities and making steady progress in marketing. Adjust sales strategy, rationally arrange production, give priority to key products and high-quality customers, and continue to expand market share.Downstream automotive aluminum and aluminum for new energy batteries are in strong demand. The company’s 6 series and 109.19 series aluminum products, aluminum foil and other products are selling well. Processing fees for some products have been raised, and the proportion of high value-added products has continued to increase.The company has newly developed aluminum products and customers for new energy vehicles such as battery busbars, battery radiator aluminum materials, and automotive internal components.On the one hand, establish a wide range of sales network channels, market products to all parts of the world through circulation channels, e-commerce platforms, etc., and actively develop end users; on the other hand, adjust domestic and foreign product sales price policies in a timely manner to prevent aluminum ingot price fluctuations from bringing funds risk. (49) Technology and product research and development, and continuous optimization of product structure During the reporting period, the company continued to increase its investment in technology and product research and development, and the research and development expenses in the first half of the year increased by approximately 10% year-on-year.Obtained 39 authorized patents, including 3 invention patents and 30 new-type patents.Through the research and development of a series of technologies and products, the company’s technical reserves have been effectively strengthened and the company’s technological leadership in the fields of new energy, new materials, new consumption, automotive aluminum, and high-performance secondary aluminum alloys are ensured.At the same time, it increases the company’s profit growth point, reduces product costs, and enhances product market competitiveness.The company has adopted a number of measures to vigorously improve production efficiency, fully release production line capacity, comprehensively promote the integration of sales and design, and coordinate research and development with the market, effectively improving the company’s overall profitability. (36) Facilitate the green economy and promote the development of renewable resources. The company has always focused on its main business. Based on the original aluminum sheet, strip, foil and aluminum profile business, it actively seeks ways to reduce costs and increase efficiency.The national “7th Five-Year Plan” report pointed out that the domestic resource of recycled aluminum raw materials is about 12 million tons. Expanding the use of recycled non-ferrous metals is an important starting point for achieving the carbon peak goal in advance. The company actively responds to the country’s promotion of “carbon peaking”. , “Carbon neutrality” call, on the basis of the original 3 tons of renewable resources production line, build a 5 tons of recycled aluminum alloy slab project, construct and put into production the first aluminum slag green ecological resource utilization production line in China-“salt slag” Process technology route” and passed the monitoring and evaluation of the preparation working group of “Technical Specifications for Aluminium Slag Pollution Control”.Through the construction of high-standard renewable resource comprehensive utilization production lines, the harmless, high-value, and ecological recycling of resources will be realized, helping Mingtai Aluminum enter the zero-waste era of efficient recycling of resources, and promoting the low-carbon recycling and high-quality development of the aluminum industry. (XNUMX) Intelligent manufacturing, project construction shows Mingtai’s speed of manufacturing. In terms of manufacturing, the company continues to increase the automation and informatization of the main product production lines.After XNUMX months of construction of the new project, Mingsheng New Materials has built a standard factory building of XNUMX square meters for photovoltaic green industry and a feasibility research office building of XNUMX square meters. The first production line was successfully put into operation in May. Intelligent warehousing, flexible and agile logistics, build a high-end green new material enterprise, and lay a good foundation for the company’s production capacity increase.Significant changes in the company’s operating conditions during the reporting period, as well as events that have a significant impact on the company’s operating conditions during the reporting period and are expected to have a significant impact in the future

XNUMX. Possible risks

1. The risk of raw material price fluctuations The main raw material required by the company is aluminum ingots, and the cost of aluminum ingots accounts for more than 80% of the company’s production costs.At present, domestic aluminum processing enterprises generally adopt the pricing model of “aluminum ingot price + processing fee”, and the processing fee is determined by the enterprise and customers through negotiation based on product requirements, market supply and demand and other factors.Since product processing requires a certain cycle, the fluctuation of aluminum ingot prices from the purchase date of aluminum ingots to the delivery date of finished products will have a certain impact on the company’s operations and performance.To cope with the risks brought by aluminum price fluctuations, the company actively researches and analyzes the trend of aluminum prices, adopts an order-based sales model of “sales-based production”, dynamically adjusts inventory, develops the use of recycled aluminum, and conducts timely and appropriate hedging, etc. Method to minimize the adverse impact of aluminum price fluctuations on the company’s production and operation. 2. Risks of market competition my country is the world’s largest aluminum industrial country. The overall scale of the aluminum industry, including alumina, electrolytic aluminum and aluminum processing industries, has ranked first in the world for many years.There are many aluminum processing enterprises in my country, and the market concentration is low. The future development trend is that the scale of single companies and single projects will continue to expand, the industry concentration will increase, and the technical level of products will continue to improve.In the future, aluminum processing products will develop in the direction of high performance, high precision, energy saving and environmental protection, and product quality will steadily improve. The company will face market competition.The company is currently a leading aluminum rolling processing enterprise in China. If it cannot continue to enhance its competitiveness, or cannot meet the escalating requirements of customers in terms of product quality and performance, it will face certain market competition in an increasingly fierce competitive environment. risk.

XNUMX. Analysis of core competitiveness during the reporting period

(15) The strategy is clear, and the scale expansion is achieved steadily. Mingtai Aluminum focuses on its main business, develops steadily, and continuously accumulates technical experience, high-standard equipment, and abundant market resources, which enable the continuous expansion of production scale, diversified product types and customers The group has a wide range, and the annual compound growth rate of sales of aluminum plates, strips and foils has exceeded 12% since its listing.The company implements unified procurement of raw materials, takes advantage of centralized procurement, improves bargaining power, formulates production plans, reduces production costs, quickly perceives market demand, and can quickly adjust product structure in the face of market changes, keep a close eye on the forefront of industry market development, and continue to grow and grow , To create a “specialized, sophisticated and new” type of enterprise.The company is building South Korea’s Gwangyang Aluminum Project, adding 2021 tons of production capacity, and is expected to be trial production in the second half of 50; building Mingsheng New Materials 20 tons project, adding 30 to 2021 tons of new production capacity, the first phase is in 5 It was put into production in May; the 70-ton secondary aluminum and high-performance aluminum project under construction has started.The company has the courage to expand domestic and international emerging markets and further release the capacity of new projects. It is expected that the production and sales volume in 2025 will exceed 200 million tons. (45) The product structure has improved and the profit margin has been continuously improved. The downstream industries of aluminum products have strong demand, and the prices of some products have risen.The company adheres to the established strategic goals, expands the product market share while continuously optimizing the product structure. New energy battery soft package aluminum foil, electronic foil, medicinal aluminum foil, pattern plate, medium and heavy plate, coating coil, fuel tank material, GIS shell, Advantageous products such as bottle cap materials and container foils continue to increase, and continue to maintain stable and sustainable growth in net profit. Since the listing, the company has deducted non-net profits at a compound annual growth rate of about 002594%.Since its establishment, the company has continued to transform and upgrade, and has entered the industry to develop cutting-edge new energy, aluminum for new materials, aluminum for transportation, aluminum for lightweight automobiles and other high-tech and high value-added fields.At present, the company’s products have been directly or indirectly supplied to BYD (600066), Weilai, Yutong Bus (301039), CIMC Vehicles (20) and other first-tier car companies; electronics and new energy products are mainly supplied to Fujifilm, Boluo Guanye and other companies .In addition, the company has obtained the “Weapon and Equipment Quality Management System Certification” and the “Three-level Confidential Qualification Certificate for Weapon Equipment Research and Production Units”, which has laid a solid foundation for the company to enter the aerospace and military fields.As a pillar raw material for the development of modern economy and high-tech development, aluminum is expected to be developed and applied in a wider range. The rapid development of transportation, power equipment, national defense and military industry, high-end equipment, packaging and other industries will promote the rapid development of the company’s high value-added products. increase. (36) Low carbon and environmental protection, continuous innovation of cost management and control. The company plans in advance and is committed to the application of recycling, resource conservation, environmental protection, etc., and intensifies equipment transformation and technological innovation. The effect of reducing costs and increasing efficiency is significant, and effectively reduces Company production costs.In terms of raw materials: the company has completed and put into production a project to process 12 tons of waste aluminum per year, a comprehensive utilization project of scrap aluminum, a 68 tons of recycled aluminum alloy slab project, and a 1 tons of aluminum ash slag project. At present, the company’s annual processing capacity of aluminum scrap can reach 4 tons. More than tons.The company adopts international advanced technology to realize the harmless, high-value and ecological recycling of resources such as leftovers, aluminum slag, and aluminum scraps generated in the production process.In terms of production: the acquisition of Gongdian thermal power and gas transformation projects effectively reduced the main electricity and gas costs in the aluminum processing process; the waste heat recovery system continued to improve the energy utilization rate, and at the same time, innovated working ideas. Through adjusting the production process, the original Starting with auxiliary materials, the replacement of alloy additives is implemented under the premise of ensuring product quality, which effectively reduces the cost of raw and auxiliary materials in the processing process.Management: The company has implemented a group management and control system to integrate personnel, finance, production, and sales to improve the efficiency of business process operation and reduce labor intensity; comprehensively promote the all-in-one card, implement electronic management of the flow of people and logistics, and reduce operating costs. (3300) Advanced equipment and facilities lay a solid foundation for the company’s rapid development. In terms of renewable resources, the company has an internationally advanced production line for comprehensive utilization of renewable resources and the first domestic production line for green and ecological resource utilization of aluminum slag.In terms of aluminum sheet, strip and foil, the company has (1+1) hot tandem rolling production line, 1mm wide (4+1) hot tandem rolling production line, CVC six-high cold rolling mill and intelligent high-bay warehouse and other intelligent equipment.The company’s (4+1) hot tandem rolling production line is the first self-designed production line in China. After years of operation, it has accumulated rich experience and technology in controlling the production speed, temperature, thickness, plate shape and other process parameters of aluminum sheet, strip and foil. Has unique management experience in (1+3000) hot strip production line operation control.The company’s (80+12.5) hot continuous rolling production line has a product width of up to 59mm, which can be used to produce high-end products such as container plates, carriage body plates, C3.5 coal gondola medium and heavy plates, and marine medium and heavy plates.The main equipment of the company’s “2 tons of automotive aluminum alloy plate project” is the CVC six-roll cold rolling mill, which is produced and installed by German SMS company. It can be used in automobile manufacturing, aviation and other fields.The intelligent high-rack warehouse of its supporting equipment has also been put into use. It has the advantages of small floor space, large capacity, computer terminal operation, intelligent warehousing, and high efficiency. The German SMS coil three-dimensional intelligent management device is used to store semi-finished products. The intelligent high-bay warehouse is used to store finished products.In terms of aluminum profiles, the company’s wholly-owned subsidiary Mingtai Transportation New Materials imported a “large parts processing center” from Fooke, Germany, with a processing length of 1 meters and a width of 120 meters, and two “car body assembly production lines” imported from Austrian IGM. -Large parts multifunctional industrial robots and 35 “car body assembly production line-total assembly multifunctional industrial robots” have welding lengths of up to 60 meters and 82 meters, respectively. The aluminum alloy rail car bodies produced are supplied to Zhengzhou CRRC in batches.Extrusion equipment includes 125MN double-acting forward extruder, 9001MN single-acting forward extruder, 19.75MN single-acting forward extruder purchased from German SMS group. The equipment is equipped with PICOS system (process information and control system), CADEX System (isothermal extrusion control system) and Ecodrive system (energy efficiency optimization drive system). The PICOS system implements real-time monitoring, fault alarm and diagnostic analysis, and real-time production data collection for the entire production line, which realizes the flexible production of the entire production line. Automated production, continuous production.The produced profiles have high cross-sectional dimensions and shape and position accuracy, good welding performance, and good mechanical properties.The company adopts technologically advanced production equipment, which can effectively improve production efficiency and yield, ensure the stability of product quality, and lay a solid foundation for rapid expansion of production scale and optimization of product structure. (2021) Complete R&D system, injecting continuous innovation power into the company. The R&D and production technology of aluminum sheet, strip and foil is in a leading position in the domestic industry.The company has been identified as Henan Province Enterprise Technology Center, Henan Province Aluminum Plate, Strip and Foil Engineering Technology Research Center, and Henan Province Intelligent Manufacturing Factory.The independent R&D center and continuous R&D capabilities enable the company to firmly grasp the latest hotspots and trends in the development of the industry, and promote the rapid industrialization of the company’s aluminum plate, strip and foil technology research and development results.The company and its subsidiaries have successively obtained “Weapon Equipment Quality Management System Certification”, “Weapon Equipment Research and Production Unit Level 2020 Confidential Qualification Certificate”, aerospace AS2020D certification, China Classification Society, Det Norske Veritas, British Classification Society, France Certified by Classification Society and American Bureau of Shipping.The company is committed to the research and development of forward-looking technology and high value-added products. In recent years, the R&D expenditure has reached 2020 billion yuan, accelerating the company’s transformation and upgrading.During the reporting period, the subsidiary Mingtai Transportation New Materials was rated as a provincial industrial design center and a provincial enterprise technology center, and Mingtai Technology was recognized as a “Zhengzhou Enterprise Technology Center” by the Zhengzhou Bureau of Industry and Information Technology, and was awarded a key focus in the first half of 2021. Project construction “Steal Horse Award”; Zhengzhou Mingtai won the local honorary titles such as “203 Industry Leading Outstanding Enterprise”, “39 Top Ten Scientific and Technological Innovation Outstanding Enterprises”, “164 High-quality Development Enterprise” and other honorary titles.Mingtai Aluminum insists on “innovation driven”.As of the first half of XNUMX, the company has obtained a total of XNUMX authorized patents, including XNUMX invention patents and XNUMX new-type patents.

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