occurrences
The company released its 2021 semi-annual report on August 27. The first half of the year achieved revenue of 9.867 billion yuan, an increase of 34.12% over the previous year, and the net profit of the mother was 1,477 billion yuan, an increase of 79.84% over the previous year.
reviews
Q2 performance was in line with expectations. Benefiting from the impact of increased prosperity in the steel industry and higher steel prices, the company's net profit for Q2 was 924 million, up 68.07% year on year and 67.09% month on month. The production and sales volume of the company's steel products in the first half of the year was 2,0618 million tons and 2,05561 million tons respectively, down 4.10% and 0.59% from the previous year; the production and sales volume of ferrous powder was 337,900 tons and 337,900 tons respectively, up 23.64% and 76.91% from the previous year. The Q2 consolidated gross profit margin was 24.62%, an increase of 3.21 pcts over the previous month.
Adhere to Putt's combined product line and implement “two upgrades”. In the first half of the year, the company carried out R&D and trial production for high-performance, high-quality or user-customized flat spring products. Among them, 2000MPa new plate spring steel representing the international advanced level successfully completed a model road test for a domestic bus brand and supplied it in small batches; the fatigue life of a single spring made of high performance high quality flat steel spring steel for high-end truck springs passed fatigue verification to meet the technical requirements of well-known domestic commercial vehicle companies; the company structure was determined by high-end metal research institutes, universities and research institutes of the Chinese Academy of Sciences and carry out exchanges and cooperation with industrial upgrading.
Beneficial infrastructure incentives from thread elastic targets. The issuance of special bonds fell short of expectations in the first half of the year, and infrastructure growth slowed down.
The July Politburo meeting clearly proposed that in the next few months, on the premise of ensuring quality and efficiency, the issuance of local bonds will be gradually implemented in cooperation with the “14th Five-Year Plan” planning project. The company's main business is long wood products, mainly threads and fine wires. “Seagull” brand construction steel is a famous trademark of Jiangxi Province, and it has a high market share and flexibility in Jiangxi Province, which is expected to fully benefit.
Profit Forecast & Investment Advice
It is estimated that the company will achieve net profit of 2,698 billion yuan, 2,864 billion yuan and 2,866 billion yuan respectively in 2021-2023, achieving EPS of 1.25 yuan, 1.33 yuan, and 1.33 yuan respectively, and corresponding PE of 4.43 times, 4.17 times, and 4.17 times respectively. Maintain a “buy” rating.
Risk warning
The price increase of raw materials is too high; the risk of the company's downstream regions and industry concentration; infrastructure growth falls short of expectations.