21Q2 income / homing net profit 30% compared with the same period last year, maintaining the "overweight" rating on August 24, the company released semi-annual report: 21H1 realized income / homing net profit of 2.34 billion yuan, year-on-year + 18.6% Universe 612.5%; 21Q2 realized income / homing net profit of 1.22 billion yuan, + 9.3% Universe 30.4% year-on-year. We believe that Baowu's entry into the company is still in progress, and if successful, the company's supply share of Baowu refractory materials is expected to increase, or bring an increase in market share and improved profit margins. We maintain the 2021-23 EPS forecast of 0.22 EPS 0.46 yuan, CAGR 57.0%. Comparable company's 21-year Wind consensus expected average 0.6xPEG/21-23 CAGR 26.7%, taking into account the company's shareholder advantage, maintain a 21-year 1.0xPEG, maintain the target price of 12.76 yuan, maintain the "overweight" rating.
The income of 21H1 steel and glass refractories is growing rapidly, and the gross profit margin is improved year on year. The income of 21H1 steel / cement kiln / glass kiln refractories is 1.42 billion yuan, which is + 22.4%, 3.8% and 95.2%, respectively. The increase in revenue from glass kiln refractories is mainly due to the increase in the development of photovoltaic glass market while stabilizing the daily glass market. 21H1 company gross profit margin 17.5%, year-on-year + 1.3pct (considering freight under the same caliber), 21Q2 gross profit margin 17.6%, month-on-month + 0.2pct, the profit level has improved, of which 21H1 cement kiln / steel refractory gross profit margin of 28.4% 12.6%, year-on-year + 2.0/-0.5pct.
The 21H1 expense rate rose slightly, and the operating cash flow significantly improved the 21H1 expense rate by 13.3%, year-on-year + 0.2pct (considering the same caliber of freight). The expense rate is relatively stable, of which the sales / management / R & D / financial expense rate is 3.6% shock 5.1% shock 3.2% 2.0%, year-on-year + 0.5/+0.3/-0.03/-0.6pct, in which the decrease in financial expense rate is due to less interest expenses. 21H1 deducts the non-homing net interest rate of 0.8%, compared with the same period of last year + 0.9 pctten 21Q2 is 0.6%, which is the same as / compared with-0.1/-0.5pct.
At the end of 21H1, the company's interest-bearing debt ratio / asset-liability ratio was 33% and 73% respectively, year-on-year-4/-3pct, and the debt ratio decreased. At the end of 21H1, the proportion of revenue / cost payable is higher than that of the same period last year-2.2/-25.2pct, the ability to collect money downstream is improved, and the ability to occupy funds from the upstream is much lower. 21H1 operating net cash flow of 60 million yuan, year-on-year + 110 million yuan, due to the company's increased payment recovery work, due to the decline in receivables and inventory compared with the same period last year.
Baowu holding matter continues to move forward, and after success, it is expected to rely on the advantage of major shareholders to quickly increase its share. The major asset restructuring of Baowu Group (unlisted) has not been approved by the CSRC, but the company announced on May 16, decided to revise and improve the major asset restructuring plan, full information disclosure, and continue to promote this major asset restructuring. We believe that if successfully implemented, the company's controlling shareholder will be changed from China National Building Material (3323 HK) to Baowu Group. Baowu Group has a large demand for steel refractory products, and the integration of the steel industry under the background of carbon neutralization is expected to accelerate. Baowu Group may continue to promote its merger and reorganization, which is expected to lead to a continued increase in its crude steel production. The follow-up company has a large improvement space in its internal refractory products share, while relying on the background of central enterprises for external integration is also worth looking forward to, the company steel refractory business development is expected to accelerate, market share is expected to accelerate.
Risk hint: the prosperity of the iron and steel industry is declining, and the risk of failure of asset restructuring events.