中国铝业：The Special Action Plan to Improve Quality and Efficiency and Increase Returns For2024
Stock Code: 601600Stock Short Name: ChalcoAnnouncement No.: Lin 2024-018
ALUMINUM CORPORATION OF CHINA LIMITEDANNOUNCEMENT ON THE SPECIAL ACTION PLAN TO“IMPROVE QUALITY AND EFFICIENCY AND INCREASE
RETURNS” FOR 2024The board of directors and all directors of the Company warrant that there are no falserepresentations or misleading statements contained in, or material omissions from thecontents of this announcement, and jointly and severally accept responsibilities for thetruthfulness, accuracy and completeness of this announcement.In recent years, with the strong support from all parties, and being committed tothe strategic objectives of creating “four extra strong” and building itself into aworld-class company, Aluminum Corporation of China Limited (hereinafter referredto as Chalco or the Company) continues to deepen its efforts to improve quality andefficiency and enhance its value-creation capability, with the quality of its operationsand the operating results steadily improving. In order to implement the ShanghaiStock Exchange’s open initiative for listed companies to carry out the special actionsto “improve quality and efficiency and increase returns”, practice the developmentconcept of “investor-centered”, further improve the quality of listed companies andestablish a good image in the capital market, Chalco focuses on production andoperation management, technology and innovation-driven development, value creationenhancement, information disclosure and investor relations management, etc., andhas formulated the special action plan to “improve quality and efficiency and increasereturns”.I.STRENGTHENING STRATEGIC LEADERSHIP AND CONTINUOUSLY
OPTIMISING THE INDUSTRIAL LAYOUTGuided by the strategic leadership, and aiming to realise the strategic objective ofbuilding itself into a world-class aluminum company with global competitiveness,Chalco strives to become a ballast stone with extra strong mineral resources, anoutstanding main force with extra strong technological innovation capabilities,a pillar with extra strong high-end advanced materials, and a leader being extrastrong in terms of green, low-carbon, cost-effectiveness and digital intelligence,and continues to optimise its three core industries, i.e. bauxite, alumina andelectrolytic aluminum, specialize in three core sub-industries, i.e. high-purityaluminum, aluminum alloy and fine alumina, refine three supporting industries,i.e. carbon, coal and electricity, strengthen three synergistic industries, i.e.trade, logistics and materials, solidify three green industries, i.e. red mudutilization, recycled aluminum and electrolysis hazardous waste disposal,with the “35” industrial development pattern having been established andits core competitiveness and comprehensive competitive strength having beencontinuously improved.
Closely centering on the strategic objectives, the Company will continue tooptimise its industrial layout, promote project investment in line with theprinciples of higher standards, better quality, better equipment and strongercompetitiveness, and strive to set up the industrial benchmarks, so as to remainas a leader in the industry in terms of competitiveness. Firstly, the Companywill focus on the development of its main business, increase the investment inits main business, promote the capital, technology, talents and other types ofresources to flow to its main business, and continuously enhance the profitabilityand market competitiveness of the core business, striving to be a model amonglisted companies with outstanding main business, and excellent and strongdevelopment. Secondly, the Company will promote the “coastal and overseas”strategy in an in-depth manner. As for the existing alumina production capacity,the Company will adhere to the principle of setting production target based on themines, make optimisation and upgrading, and promote the transfer of inefficientalumina production capacity to the coastal areas and overseas. The Companywill accelerate the construction of the Guangxi Huasheng phase II 2 million-tonsalumina project, give priority to the study and promotion of overseas bauxiteand alumina projects, and enhance the Company’s ability to achieve sustainabledevelopment. Thirdly, the Company will accelerate the implementation ofclean energy conversion for electrolytic aluminum, orderly promote the “newenergy+” of its subsidiaries in Inner Mongolia, Qinghai and Gansu, give priorityto promoting the Huayun 420,000-tonne light alloy materials project in InnerMongolia, and the Qinghai Branch’s 500,000-tonne electrolytic aluminumupgrading project, to create a new mode of development integrating powersupply, power grid, load and storage. The Company will make use of the newtechnology to transform and upgrade the existing production capacity, to reducepower consumption and carbon emission level, will enhance the proportion ofclean energy use, reduce energy and resource consumption, and actively promotethe achievement of the national “dual carbon” strategy.
II.CONSOLIDATING THE FOUNDATION FOR DEVELOPMENT AND
CONTINUOUSLY ENHANCING VALUE CREATION CAPACITYThe Company is a leading enterprise in aluminum industry in China, rankingamong the top in the global aluminum industry in terms of overall strengths. TheCompany is a large manufacturer and operator with integration of explorationand mining of bauxite, coal and other resources; production, sales and technologyresearch of alumina, primary aluminum, aluminum alloy and carbon; internationaltrade; logistics business; thermal and new energy power generation. TheCompany’s production capacity for each of alumina, fine alumina, electrolyticaluminum, high purity aluminum, aluminum anodes and gallium ranks first in theworld.In recent years, guided by value creation, the Company has taken multiplemeasures to reduce costs and increase efficiency, with the asset quality andoperating efficiency being steadily improved, and the foundation for high-qualitydevelopment being continuously consolidated. In 2023, the revenue of theCompany amounted to RMB225.1 billion; the total profit amounted to RMB15.1billion, representing a year-on-year increase of 14%; the net profit amountedto RMB12.6 billion, representing a year-on-year increase of 16%, exceedingRMB10 billion for the third year in a row; the net profit attributable to the parentamounted to RMB6.7 billion, representing a year-on-year increase of 60%; andthe operating net cash flow was RMB27 billion. The asset size of the Companymaintained at the level of over RMB200 billion, and the gearing ratio steadilydecreased from 66.25% as at the end of 2019 to 53.30% as at the end of 2023,representing a decrease of 12.95 percentage points.The year 2024 is a critical linking year for the “14th Five-Year” Plan. Chalco willfurther expand the scale of its production capacity of alumina and electrolyticaluminum, striving to remain as the world’s No. 1, will further push forwardthe reduction of costs and improvement of efficiency, and through promotingthe management models of “Three Transformations and One Improvement”for alumina and “Five Standards and One Control” for electrolytic aluminum,strengthening comprehensive budget management, improving the efficiencyof capital operation and other quality and efficiency improvement measures,will continue to consolidate the foundation for development and improve theCompany’s ability to create value.
III.ACCELERATING THE CULTIVATION OF NEW QUALITY
PRODUCTIVITY BY THE EMPOWERING OF TECHNOLOGICALINNOVATIONChalco adheres to taking technological innovation as the first driving force forhigh-quality development and comprehensively reconstructs the innovationsystem. The Company builds an independent innovation platform withprofessional research institutes as the core, a platform for support, guaranteeand transformation of achievements with manufacturing bases as the mainbody, a platform for innovation and cooperation jointly with scientific researchinstitutes and universities through medium- and long-term cooperation, as wellas a platform for cooperation in application technology jointly with importantdownstream customers, to accelerate new product development and newtechnology application, promote product iteration and upgrade, and enhance theCompany’s leadership in terms of technology.In 2024, Chalco will further focus on “technology + resources”, “technology +energy saving”, “technology + new products”, “technology + small metals” and“technology + solid waste”, promote technological breakthroughs in key areas,including the use of low-grade resources, green and low carbon, comprehensiveutilization of small metals and red mud, recycling of three wastes in aluminumelectrolysis, fine alumina, high purity materials, aluminum alloys, digitalintelligence and other key areas, to solve the “choke point” technical problems,so as to build itself into a source of original technology, and lead the high-qualitydevelopment of the aluminum industry.IV.FOCUSING ON THE “KEY FEW” AND STIMULATING THE POWER
AND VITALITY OF THE ENTERPRISESThe Company actively builds a new type of management responsibility system,focuses on the “key few”, establishes and improves incentive mechanism andappraisal and evaluation system, stimulates entrepreneurial talents, and enhancesthe power and vitality of the enterprises. For key management personnel and coretechnical personnel, the Company has implemented the restricted share incentiveplan, granted a total of 139 million restricted shares to 1,206 participants, andimposed strict appraisal and evaluation. In 2023, the Company repurchased andcancelled all or part of the 3,210,323 restricted shares that had been granted to 43participants but not yet unlocked. For the management personnel of the Company,the Company has entered into clear performance responsibility agreementsstipulating core targets, development targets, and a combination of financial andnon-financial targets with the members of the management personnel, whichquantifies the appraisal and evaluation system for the management personnel,which is directly linked with the management personnel’s remunerationperformance.
In addition, the Company will lay importance on improving the quality andexpanding the coverage of the tenure system and contractual management, anddeepening the market-oriented employment reform. The Company will fullyimplement the tenure system and contractual management for managers, improvethe working mechanism of monthly analysis, quarterly notification, annualrewards and penalties, and effectively push forward the competition for posts,downgrading and incompetence exit system for the management personnel of theCompany.V.STEADILY INCREASING RETURNS TO INVESTORS WITH AN
INVESTOR-CENTERED APPROACHThe Company is committed to achieving long-term stable returns for investors. Inthe past three years, with the gradual improvement of the Company’s operatingresults, the amount of cash dividends has been gradually increased, and theincrease in the amount of cash dividends for the year 2023 over the same periodof the previous year amounted to 122%, and the level of returns to investors hasbeen steadily improved. The cash dividend distribution of the Company in thepast three years is shown in the table below:
Year
Dividendper 10 shares
Total cashdividenddistribution
Consolidatednet profitattributableto the parent
As apercentage
of theconsolidatednet profitattributableto the parent(RMB Yuan)(RMB 0,000)(RMB 0,000)
20210.3254,489507,95610.73%20220.3661,782419,19314.74%20230.80137,267671,69520.44%The Company attaches great importance to the return to investors. With dueconsideration to the characteristics of the industry in which the Company isoperated, the stage of development and strategic planning of the Company,as well as the Company’s business model, profitability and significant capitalarrangements, the Company has reasonably and steadily improved the level ofreturns to investors by gradually increasing the proportion of cash dividends eachyear to no less than 30 per cent of the distributable profit realised in that year,and will further increase the proportion of dividends with the optimisation ofthe Company’s layout, acquisition of resources, green and low-carbon and otherprojects and the improvement of its operating results.
VI.STRENGTHENING INVESTOR RELATIONS MANAGEMENT AND
ENHANCING CORPORATE TRANSPARENCYThe Company adheres to the principles of truthfulness, accuracy, completeness,timeliness and fairness, actively fulfils its information disclosure obligations,strictly manages the persons possessing inside information, continuouslyimproves the quality of information disclosure and the level of investor relationsmanagement, safeguards the investors’ right to information, fully and effectivelyconveys the value of the Company to the capital market, facilitates investorsin making investment decisions, and effectively protects the lawful rights andinterests of the investors. Carrying out multi-level communication and exchangeswith investors/analysts through regular reports, extraordinary announcements,shareholders’ meetings, investor briefings, roadshows and reverse roadshows,reception of investor visits, answering investor calls, SSE E-interaction andother channels, the Company is committed to building itself into a leading listedcompany in the industry that is approachable, comprehensible, transparent andtrustable, with strong core competitiveness and great market influence.Looking ahead, Chalco will be guided by the strategic objective of “buildingitself into a world-class company”, anchored on the strategic positioning ofbeing extra strong in terms of mineral resources, being extra strong in terms oftechnological innovation capabilities, being extra strong in terms of high-endadvanced materials, and being extra strong in terms of green, low-carbon,cost-effectiveness and digital intelligence, striving to create a new situation ofhigh-quality development through the practice of the business philosophy of“Creating Value with Rewarding as the Top Priority” with stronger commitment,greater ambitiousness and better results.The announcement is hereby given.
The Board of Directors ofAluminum Corporation of China Limited*
8 April 2024