Events:
The company released the semi-annual report for 2021: the total revenue of H1 company in 2021 was 2.01 billion yuan, an increase of 53.2% over the same period last year; the net profit returned to its mother was 70.208 million yuan, an increase of 80.4% over the same period last year, which is in line with our expectations.
Comments:
The performance is good. In 2021, the company's Q2 realized revenue of 1.17 billion yuan, an increase of 47% over the same period last year; the net profit returned to its mother was 44.504 million yuan, an increase of 83.6% and 73.1% respectively over the same period last year and month-on-month. In the first half of the year, although the prices of raw materials fluctuated sharply and overseas exports were affected by the epidemic, the company adjusted its business layout in line with market changes, giving full play to the complementary role of domestic and foreign businesses, relying on a complete product chain and factory layout, to maintain strong growth, and the above performance is in line with our expectations.
The European and American market order is good, the high profit proportion increases. The company is the largest exporter of steel wheels for commercial vehicles in China. The revenue of the wheel business in the first half of the year was 870 million yuan, an increase of 51.1% over the same period last year. Orders in European and American markets were good in the first half of the year, and the increase in the proportion of strong profitability orders improved the company's profitability.
The construction of Caofeidian production base, the market share is expected to rise. In the second half of the year, the company will "copy" the construction of Tangshan Caofeidian production base by virtue of its existing management advantages. The investment period of the project is 3-5 years. After all, it is estimated that the annual steel Kaiping and blanking processing capacity is about 180000 tons. The annual output of steel wheels is about 4.7 million (including 1.2 million large rings, 1.5 million medium rings, 1.5 million small rings and 500000 special rings for agricultural machinery engineering). On the one hand, the commissioning of the project will greatly reduce logistics time and save logistics costs, solve the distribution of raw materials at home and abroad, and further reduce costs in terms of raw material supply; on the other hand, it can meet the supply demand of mainframe factories in Northeast and North China markets. expand market share.
Set up a wheel steel test base and join hands with Shougang to develop lightweight steel wheel products. The company cooperates with Shougang to develop high-quality wheel high-strength steel for the production of lightweight steel wheel products. Among them, the tensile strength of 590Mpa high-strength materials, has been used in large quantities in the full range of products, annual production and sales of more than 1 million; 650Mpa high-strength materials, used in the domestic market 22.5x9.00 products, has mass production more than 200000; 780Mpa high-strength materials, used in Europe and the United States high-end market 22.5x8.25 products, mass production has reached 100000. Lightweight steel ring products account for more than 50% of all the company's specifications.
The results are in line with our expectations and maintain our "buy" rating. We maintain the company's forecast revenue of 100 million yuan in 35-45-59 from 2021 to 2023, with a year-on-year growth rate of 19.0%, 29.4% and 30.5%, respectively. Based on the expected results of the China report, we maintain a net profit of RMB 1.4 million, with a growth rate of 80% / 57% respectively. The corresponding PE is 21x/14x/11x, which is lower than the valuation of comparable companies. Considering the steady development of domestic prefabricated buildings and green building steel structures, the company as a high-quality industrial steel structure manufacturer will benefit; automobile production and sales continue to pick up, and the company's aluminum wheel project gradually brings new growth points; therefore, the company maintains its "buy" rating.
Risk tips: price fluctuations of major raw materials; impact of international market on export business, exchange rate fluctuations.