The Zhitong Finance App learned that Zheshang Securities released a research report saying that Innovation Industry (02788) announced H1 revenue of 11.533 billion yuan in 2026, an increase of 32.42%; net profit to mother of 2.305 billion yuan, an increase of 166.15%; net profit after deducting non-return to mother of 2,278 billion yuan, an increase of 146.92%. The bank expects the company to achieve operating income of 218.56, 222.93, and 22,516 billion yuan respectively in 2026-2028, and net profit to mother of 44.09, 53.41, and 6.233 billion yuan, respectively. The current market value corresponds to PE valuations of 6.02, 4.97, and 4.25 times, respectively, to maintain a “buy” rating.
The main views of Zheshang Securities are as follows:
The price center of electrolytic aluminum moved upward, and the electricity sales business contributed to revenue growth
2026H1's electrolytic aluminum, alumina and other related products achieved revenue of 8.025 billion yuan and 2,520 billion yuan respectively, up 21.18% and 34.41% year-on-year, accounting for 69.58% and 21.85% respectively; other products (including waste, electricity and steam supply) achieved revenue of 988 million yuan, an increase of 366.13% year-on-year, and the revenue share increased to 8.57% from 2.43% in the same period last year. By category, the increase in revenue from electrolytic aluminum was mainly due to a year-on-year increase in sales prices. The average spot price of aluminum on the Shanghai Futures Exchange rose 19.4% year on year in the first half of the year, the average monthly spot price of 3,382 US dollars/ton on the London Metal Exchange rose 33.2% year on year; the increase in revenue from alumina and other related products was mainly due to an increase in production and sales volume; the high increase in revenue from other products was due to an increase in electricity sales business. Electricity revenue of 710 million yuan during the reporting period was 115 million yuan in the same period last year.
Cost advantages continue to be realized, and green power alternatives open up space for cost reduction
2026H1's total tax-inclusive aluminum cost is about 14,500 yuan, 1,605 yuan/ton lower than the national tax-weighted average total cost of electrolytic aluminum of 161,000 yuan/ton; the decline in raw material purchase prices combined with green electricity substitution and technical modifications to reduce electricity consumption, and 2026H1 electrolytic aluminum sales cost of 4.543 billion yuan decreased 10.2% year-on-year. On the power side, the company is building 6 coal-fired power generators with an installed capacity of 330.0 megawatts around 7881,000 tons of electrolytic aluminum production capacity, and is currently constructing 1,50.0 megawatts of wind power and 110 megawatts of photovoltaics at the end of the period. At the end of the period, it has built 1,040 megawatts of wind power, 110 megawatts of photovoltaics, and an installed green energy completion rate of about 66%. After completion, the proportion of green electricity usage will exceed 50%, far exceeding the target requirements of 25% of the national industrial policy. On the raw material side, the company's current alumina and electricity self-sufficiency can cover 100% of production and operation. The 2026H1 alumina business division has internal sales of 660 million yuan, and the cost pressure is clearly reduced due to self-supply of raw materials and the price of alumina.
Integrated closed-loop reinforcement, Saudi project progressed on schedule
On the resource side, 2026H1 acquired 100% of Tongliao Smart Mining's shares for 1.01 billion yuan to obtain prospecting rights for the Huolin River No. 4 coalfield. The mine is still in the exploration and development stage, providing a long-term supply guarantee for fuel for its own power plant. On the smelting side, the company acquired the remaining 41.5% of Shandong Chuangyuan's shares for 526 million yuan. After delivery, Shandong Chuangyuan became a wholly-owned subsidiary to reduce operating risks caused by fluctuations in raw material prices and ensure long-term stability of production and operation; alumina production capacity was 1.8 million tons/year, and the baking capacity under construction reached 3.8 million tons after completion. On the overseas side, Saudi Arabia's 50,000-ton electrolytic aluminum project, in which the company holds 33.6% of its shares, has fully started and is expected to be put into operation in 2027. The company said that the total production capacity of electrolytic aluminum will increase significantly after the entire project is put into operation.
Risk Alerts
Prices of electrolytic aluminum products fluctuate greatly; energy prices fluctuate greatly; progress in green energy project construction and grid connection falls short of expectations; Saudi project construction and commissioning progress and geopolitical risks; risk of lifting the ban on restricted stocks