Event
The company released the third quarterly report of 2021: in the first three quarters of 2021, the company achieved operating income of 4.955 billion yuan, an increase of 19.99% over the same period last year, and a net profit of 204 million yuan, an increase of 38.82% over the same period last year.
Corresponding to 2021Q3, the income was 1.766 billion yuan, an increase of 9.82% over the same period last year, and the net profit of returning home was 51 million yuan, down 14.50% from the same period last year.
Comment
Continuously negotiate the price with downstream customers and pass on the price increase of raw materials. The gross profit margin / sales expense rate / management expense rate / R & D expense rate / financial expense rate of 2021Q3 is 9.60% / 0.62% respectively, which is 3.39% / 0.98% / 0.28% respectively, which is higher than that of 2021Q2-2.46pct/-0.22pct/-0.29pct/-0.02pct/ 0.12pct. The reason for the decline in gross profit margin is the rise in commodity prices. The price of aluminum in Shanghai has risen from about 15000 at the beginning of 2021 to more than 25000. Compared with the other two can enterprises, Baosteel Packaging has a strong advantage in raw material cost and large-scale production at the same time. The profit level of the two-piece can business is relatively high. At the end of June and the end of October, the company negotiated with other peer companies and downstream customers to raise the price of single cans twice in a row, covering the increase in the price of raw material aluminum. Before the new round of price adjustment in 2022, if the aluminum price does not reach a new high, then according to the price adjustment of the single can, the company's profit per can will be greatly increased.
The supply side of the industry accelerates clearing, and the company continues to increase its market share. The price of 2021Q3 raw material is high, and the quotation of small and medium-sized enterprises has been relatively high, so it is difficult to make a profit, superimposed power restriction and production restriction, and small and medium-sized enterprises in the industry will accelerate clearance. The company's investment in production line equipment is accelerating, and the company's production capacity is expected to reach 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: due to the higher-than-expected increase in raw material aluminum prices in the third quarter, we downgrade the company's performance forecast for 2021. We expect the company's EPS to be 0.28 / 0.50 / 0.69 yuan respectively in 2021-2023, and the current stock price corresponds to 33.2 times / 18.3 times / 13.2 times of PE in 2021-2023. It is recommended to buy.
Risk tips: raw material costs fluctuate, price increases fall short of expectations, performance forecasts and valuations fall short of expectations