Event: the company achieved operating income of 15.991 billion yuan in the first three quarters, an increase of 34.88% over the same period last year, and a net profit of 2.141 billion yuan, an increase of 43.04% over the same period last year. The net profit after deducting non-return was 2.083 billion yuan, an increase of 45.93% over the same period last year.
In the third quarter, the company's performance decreased slightly by 1.68% compared with the same period last year: in the third quarter alone, the company achieved operating income of 6.124 billion yuan, an increase of 36.12% over the same period last year, an increase of 5.12% over the same period last year, and a net profit of 664 million yuan from the same period last year, down 1.68% from the same period last year and 28.14% from the same period last year.
In the third quarter, the company's steel sales were basically flat on a month-on-month basis: the company's steel sales in the third quarter were 1.1602 million tons, down 0.53% from the previous quarter, and 1.04% from the same period last year, which was much lower than the national average (16.28%). Iron powder sales of 198400 tons, an increase of 7.83% month-on-month, down 40.63% from the same period last year.
In the third quarter, the gross margin per ton of steel narrowed by 27.63%; in the third quarter, the gross margin per ton of steel products was 766 yuan, narrowed by 27.63%, slightly larger than the industry average (27.35%); and the gross margin per ton of iron fine powder was 1066 yuan, narrowing by 2.19%.
The company's expense rate declined for three consecutive quarters: in the third quarter, the company's sales, management and R & D expenses were 0.27,1.64 and 16 million yuan respectively, with a month-on-month change of-18.18%,-6.82% and 0%, but the company's operating income increased by 5.12%. Financial expenses are negative for 16 consecutive quarters, and the expense rate is only 2.67%, a decrease of 0.62 percentage points. It fell for the third consecutive quarter to its lowest level in nearly a year and was at an all-time low.
Benefiting from the region and product structure, the company's steel product profits remained high in the fourth quarter: if the crude steel output in Jiangxi region was flat in the fourth quarter, the pressure of reducing production in Jiangxi (- 2.36%) was less than the national average (- 5.79%). If the company's annual steel sales were the same as the same period last year, the steel sales in the fourth quarter would be 1.2194 million tons, an increase of 2.05% over the same period last year and 5.1% month-on-month growth. The average gross profit per ton of steel in October was 889 yuan, an increase of 42.79% compared with the third quarter (623 yuan). The company's steel products are mainly long products, its supply is expected to contract more strongly, and there is more room for gross profit improvement. The superimposed company has obvious cost advantages, and the company's steel product profitability is expected to remain high in the fourth quarter.
Earnings forecast, valuation and rating: the company is located in Jiangxi Province in the later period of crude steel production reduction pressure is smaller, and the main products long wood supply side contraction is expected to be stronger, we maintain the profit forecast, the company is expected to return to the home net profit of 27.86,28.5 and 2.907 billion yuan in 2021-2023, corresponding to EPS of 1.29,1.32,1.35 yuan respectively, maintaining the "overweight" rating.
Risk hint: the demand for long wood has fallen sharply; the implementation of the reduction of crude steel production across the country is not as strong as expected.