Report guide
On the evening of October 7, the company issued the "performance Forecast for the first three quarters of Beijing Shougang Co., Ltd."
In the first three quarters, the company realized a net profit of 5.64 billion yuan to 6.04 billion yuan, an increase of 380% to 414% over the same period last year, of which 2021Q3 realized a net profit of 2.207 billion yuan to 2.607 billion yuan.
Main points of investment
Jingtang base 19% equity consolidation, thickening the performance of the parent company in the first half of the year, the company completed the purchase of Jingtang minority stake landed, and began to complete the consolidation in the third quarter. Among the two bases of the company, Jingtang Company has the characteristics of large scale, complete variety and obvious logistics advantages, and its overall profitability is in a leading position in the whole industry. In the second quarter of this year, Jingtang made a profit of 560 yuan per ton of steel, leading the industry average. On the other hand, the peak of depreciation at the cost end of Jing-Tang base has passed, the financial expenses have gradually declined, and the cost inflection point has appeared. It is expected that next year, the company is expected to further acquire the remaining minority stake in Jingtang.
The company benefits from industry-wide production reduction
Crude steel output in the industry declined rapidly in the second half of the year. It is expected that the decline in production in the fourth quarter is likely to accelerate. The company's two major bases, as super class An emission enterprises, enjoy independent emission reduction. Therefore, the company will continue to maintain stable production in the second half of the year, while the industry-wide supply contraction is conducive to the stability of market prices of good products.
High-end electrical steel has stable profits and strong growth in the future.
The company is an electrical steel leading enterprise. The output of electrical steel accounts for nearly 10% of the equity output. As a necessary steel product in electric power and new energy industry, with the rapid development of new energy industry, electrical steel products are in short supply.
In the first half of the year, the price of electrical steel remained high. And because the electrical steel has high requirements for technology and equipment, and the elasticity of supply release is weak, the price of electrical steel is maintained at a high level. At present, the demand of energy consumption double control for energy saving and power grid upgrading of industrial enterprises is significantly increased, and the future market space of high-end non-oriented and oriented silicon steel is huge.
Profit forecast and valuation
The company develops to high value-added steel products, and strategic products are expected to continue to improve in the future. Therefore, it is expected that the market price of the company's products will fluctuate less in the future. In addition, the gradual increase in the proportion of strategic products will improve the overall profit level of the company. From 2021 to 2023, the company is expected to achieve a net profit of 80,0104,000,000 yuan, corresponding to a PE of 4.84max, 4.09, 3.74x respectively, maintaining a "buy" rating.
Risk tips: upstream raw material prices rose sharply, demand is lower than expected, and so on.