Event
The company released its mid-2021 report: 2021H1 achieved an operating income of 3.189 billion yuan, an increase of 26.48% over the same period last year, and a net profit of 152 million yuan, an increase of 75.75% over the same period last year. Corresponding to 2021Q2, the income was 1.672 billion yuan, an increase of 8.92% over the same period last year; the net profit from home was 71 million yuan, down 3.42% from the same period last year, and the performance exceeded expectations.
Comment
The cost control effect is better than that of peers, and Q3 gross profit margin will be increased. The gross profit margin / sales expense rate / management expense rate / R & D expense rate / financial expense rate of 2021Q2 is 12.06% / 0.84% / 3.68% respectively, which is 0.88pct/-0.19pct/ 1.16pct/ 0.45pct/-0.05pct compared to 2021Q1. The decline in gross profit margin is due to changes in accounting standards and rising commodity prices. Shanghai aluminum prices rose to more than 20000 from about 15000 at the beginning of 2021. Baosteel's packaging cost control is better than that of other listed metal packaging companies. the decline in gross profit margin is relatively small. At the end of June, the company raised the price of single cans through consultation with downstream customers, and the gross profit margin is expected to improve significantly in the third quarter compared with the second quarter.
There will be a substantial increase in operating cash flow, strengthen investment in production capacity construction, and accelerate the increase of market share. 2021Q2's net operating cash flow is 508 million yuan, while improving its operating cash flow, the company strengthens its production capacity construction, 2021Q1/ Q2 pays 2.19 / 295 million yuan in cash to build fixed asset investment, the company's production line equipment investment is accelerated, and the Lanzhou project is expected to start production of 2021Q4; Malaysia Kuala Lumpur industrial park production line is expected to be put into production in 2022Q1; Anhui project equipment delivery time is expected by the end of the year, 2022Q1 is expected to be put into production. The company is expected to have a production capacity of 16 billion cans by 2022. In the next three years, the CR4 of the industry will increase from 70% to 90%, the company's market share will increase faster than its competitors, and the cost advantage brought by scale will be better than that of competitors, which will help to enhance the long-term cooperation with downstream customers.
Investment suggestion: after the price increase, we raise the company's performance forecast, we expect the company's EPS to be 0.30 / 0.50 / 0.69 yuan respectively in 2021-2023, and the current stock price is 32.9 times / 20.1 times / 14.5 times corresponding to 2021-2023 PE.
Risk tips: raw material costs fluctuate, price increases fall short of expectations, performance forecasts and valuations fall short of expectations