First Read: Tianshan Aluminum Group "AIC 2026: volume ramp, profits step up"

研报英文原文证据摘录

First Read: Tianshan Aluminum Group "AIC 2026: volume ramp, profits step up"

Forecast returns

Forecast price appreciation 39.6%

Forecast dividend yield 6.2%

Forecast stock return 45.9%

Market return assumption 6.8%

Forecast excess return 39.1%

Company Description

Tianshan Aluminum reverse merged listco Shimge Pump Industry Group in 2020. Tianshan

Aluminum is engaged in the aluminium smelting, high-purity aluminium, alumina and

aluminium foil business. It has 1.2mtpa aluminium capacity in Xinjiang, China, according to

its 2024 annual report.

Valuation Method and Risk Statement

We use a PE methodology to set our price target.

We believe the key risks for the aluminium industry supply side include but not limited to 1)

China's sudden lift of aluminium capacity ceilling at 45mtpa, which might hit investors'

confidence in aluminium's constrained supply and thus negatively impact aluminium price

and equity price; 2) Southwestern China's potential power rationing resulting in partial

aluminium smelters curtailment, which might lift aluminium price and benefit aluminium

smelters not located in these regions; 3) European smelters' potential restart should Russia-

Ukraine ceasefire and result in lower energy price in Europe; 4) Faster/Slower-than-expected

progress of Indonesia and India aluminium expansion, which might be marginally negative/

positive for aluminium price.

We believe the key risks for the aluminium industry demand side included but not limited to

1) better/worse-than-expected property and other construction activities; 2) better/

worsethan-expected subsidy implementation on electrical vehicles and home appliances; 3)

better/worse-than-expected solar module production and solar installation; 4) better/worse-

thanexpected machinery manufacturing etc.