The readings of this report are as follows:
The company's performance in the first three quarters of 2021 is in line with expectations, and the company's performance has been released steadily. Supply in the steel industry continued to contract in the fourth quarter, while demand remained resilient, and the company will continue to benefit.
Main points of investment:
Maintain the "overweight" rating. In the first three quarters of 2021, the company achieved operating income of 121.747 billion yuan, an increase of 50.84% over the same period last year, a net profit of 2.369 billion yuan, an increase of 104.15% over the same period last year, and a net profit of 848 million yuan in the third quarter, an increase of 78.84% over the same period last year.
Considering the decline of the company's production in the second half of the year compared with the first half of the year, we downgrade the company's EPS forecast for 2021-2023 to 0.300.35max 0.38 yuan (the original 0.33Universe 0.39exp 0.42 yuan). Refer to similar companies, give the company a valuation of 12 times PE in 2021, lower the company's target price to 3.60 yuan (formerly 3.96 yuan), and maintain the "overweight" rating.
The company's profitability continues to rise. The company is the second largest supplier of automobile plate in China, and has achieved full strength coverage of automobile plate at present. In the field of coated electric board, the company's market share has reached more than 50%. The company's strategic positioning is clear, and the increment of high-end products continues to make efforts. At the same time, the company's new joint venture steel and coking projects will bring performance increments for the company. We expect the company's profitability to continue to rise.
Supply continues to tighten and the company's profits may exceed expectations. Under the background of "double carbon", the production capacity expansion cycle of the iron and steel industry is over, and we believe that now is the starting point of the new prosperity of the iron and steel industry. In the winter of 21, the off-peak production limit and the Winter Olympic Games will continue to depress supply, and the profits of the iron and steel industry may remain good. With a steel production capacity of 30 million tons, the company is one of the leading steel enterprises in Hebei and will fully benefit from the upward movement of the profit center of the industry.
Vanadium battery drives the demand for vanadium products, and the company will continue to benefit. We believe that vanadium batteries are about to usher in industrialization, and the demand for vanadium products will burst. Chengde Vanadium and Titanium, a subsidiary of the company, has a production capacity of 22,000 tons of vanadium products per year, and is the second largest manufacturer of vanadium products in China. The company has a world-leading smelting technology and low cost. With the promotion of vanadium battery industrialization, the company's vanadium product profits will be gradually released.
Risk hint: the progress of vanadium battery industrialization is lower than expected; monetary policy tightens more than expected.
