Aluminum prices soar! Tianshan Aluminum vs. Nanshan Aluminum, whose hand is stronger?

Ask AI · How does geopolitics influence the competitive landscape of aluminum giants?

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Author / Pineapple Under the Starry Sky

Editor / Spinach Under the Starry Sky

Layout / Ume Under the Starry Sky

Recently, the shipping crisis in the Strait of Hormuz unexpectedly became a catalyst for soaring global aluminum prices. With several large aluminum plants in the Middle East under attack, about 9% of the world’s primary aluminum capacity faces supply disruption risks. LME (London Metal Exchange) aluminum prices once broke through $3,400 per ton, hitting a nearly four-year high. In this resource game triggered by geopolitical tensions, two key players in the domestic aluminum industry—#天山铝业（002532）与#Nanshan Aluminum (600219)—once again drew spotlight.

Source: Wind, Huaxi Securities Research Institute

2025 financial reports show that both companies delivered impressive results. Tianshan Aluminum posted revenue of 29.5B yuan, while Nanshan Aluminum achieved 34.62 billion yuan. The net profits attributable to parent after deducting non-recurring gains and losses are astonishingly close—4.66B yuan and 4.61B yuan respectively. Although their profit scales seem similar, they conceal completely different profit strategies: Tianshan resembles a calculating cost veteran, while Nanshan is like a tech expert wielding specialized skills. Today, let’s analyze which of these aluminum giants holds the stronger cards.

1. Tianshan secures upstream resources, Nanshan focuses on high-end downstream manufacturing

To understand what a company does, the most straightforward way is to see where its revenue comes from. Opening their financial statements reveals that, although both are in the “aluminum” business, their business models are entirely different.

Tianshan Aluminum is a typical resource-oriented company, with its core business firmly locked in the upstream of the industry chain. Data shows that its aluminum ingot (electrolytic aluminum) revenue accounts for 64.57%, plus 23.14% from alumina, meaning nearly 90% of its income comes from selling raw materials.

Source: Tianshan Aluminum 2025 Annual Report

This model requires tight cost control. Its base is in Xinjiang’s Shihezi, where cheap coal is available. Tianshan built its own power plants, keeping electricity costs far below industry average. This “integrated” layout—home-owned mineral resources and self-sufficient power generation—is its strongest moat. However, this model also has costs: the market is relatively closed. Financial reports show that 98.64% of Tianshan’s revenue comes from domestic sales, with overseas business making up a tiny fraction, making it difficult to enjoy the high premiums of the global high-end market.

Nanshan Aluminum, on the other hand, pursues a technology-driven approach, focusing on downstream aluminum products. Its focus has long shifted from selling ingots to high-value-added products like automotive and aerospace sheets. Its main revenue source is cold-rolled coils/plates, accounting for over 50%. These are not ordinary aluminum sheets but high-end products supplied to Boeing, Airbus, Tesla, etc.

Source: Nanshan Aluminum 2025 Annual Report

This transformation brings immediate benefits: a broader market and higher profits. A telling figure is that Nanshan’s overseas revenue share has reached 54.02%, with 32.68% gross margin on overseas sales, far higher than the 15.83% domestic margin. This indicates Nanshan has successfully embedded itself into the global high-end industry chain, earning from technology and branding.

Tianshan relies on cost advantages to defend its industry position, while Nanshan leverages technological premiums to break through industry limits. The two form a stark dislocation competition along the industry chain.

2. Tianshan has abundant cash flow, Nanshan leads in net profit margin

Although their profit scales are similar, their profit quality differs greatly. If upstream resources determine the survival floor, then profitability levels determine resilience.

Behind the data are two different management styles. Tianshan’s net profit margin is 16.31%, slightly lower than Nanshan’s 16.77%. But for an upstream company in a cyclical industry, this is already quite good.

Source: Haohai Investment Research

What’s truly impressive about Tianshan is its cash flow. In 2025, its operating cash flow reached 8.05B yuan, a 52.27% increase year-on-year, even surpassing net profit, indicating very high profit quality. This is due to meticulous management of inventory and supply chain, meaning the company’s earnings are genuinely reflected in its cash.

Nanshan’s profit model emphasizes high gross margins. With high-value products like automotive and aerospace sheets, its overall gross margin remains at a high level of 25.20%. This approach allows it to maintain substantial profits even if revenue growth slows.

Additionally, Nanshan excels in cost control, with period expense ratios (including R&D) dropping from 9.27% in 2021 to 6.38%. The scale effect is beginning to show. However, maintaining high technological barriers also entails high R&D and equipment investments, which can somewhat erode net profit margins.

Source: Tonghuashun iFinD—Nanshan Aluminum

In summary, Tianshan wins with solid cash flow, while Nanshan wins with high profit margins driven by technological barriers. Both have their strengths.

3. Tianshan faces short-term debt repayment pressure, Nanshan’s cash reserves are impressive

If profitability reflects the present, then asset and debt structure determine the future. In this regard, the two companies’ financial strategies are worlds apart.

Tianshan’s short-term debt repayment pressure is becoming evident. Financial reports show its current ratio is only 1.00, and quick ratio is as low as 0.51, both below the safety line. In plain terms, the cash and liquid assets on its books are insufficient to cover debts due within a year. Although the company is actively repaying long-term debt using high profits, with debt-to-asset ratio down to 45.40%, the short-term liquidity tension cannot be ignored. This is due to its asset-heavy expansion model, where large amounts of capital are tied up in fixed assets and inventories, reducing short-term liquidity.

Source: Haohai Investment Research

In contrast, Nanshan’s financial position can be described as excellent or even conservative. Its debt-to-asset ratio is only 19.28%, remarkably low for manufacturing. Even more striking, cash and cash equivalents account for 34.14% of total assets, and its quick ratio is 2.24. This means Nanshan holds abundant cash, with almost no short-term debt pressure.

This extremely prudent financial structure provides a reliable safety net amid macroeconomic uncertainties. However, it may also imply a somewhat conservative approach to high-return investments, with large amounts of idle capital.

Overall, Tianshan relies on resource advantages, while Nanshan breaks through with technological prowess. Ultimately, both are industry leaders, but Nanshan’s financial safety edge makes its bottom line more resilient.

Note: This article does not constitute any investment advice. The stock market involves risks; invest cautiously. No pain, no gain.