Report guide
On the evening of November 30, the company issued the report on issuing shares to purchase assets and raising matching funds and related transactions (draft). The company intends to purchase 49% of the steel trading company held by Shougang Group by issuing shares, with a total consideration of 5.859 billion yuan, and at the same time issuing shares to no more than 35 specific investors to raise supporting funds of no more than 2.5 billion yuan.
At the same time, the company issued a "Plan for the return of shareholders' dividends over the next three years (2022-2024)".
In the next three years, when the company makes profits in the current year and the cumulative undistributed profits are positive, the company will distribute dividends in the form of cash, and the cumulative profits distributed in the form of cash in the past three years shall not be less than 30% of the annual average annual profits of the parent company and the consolidated statements realized in the last three years.
Main points of investment
The two bases of Jingtang and Qian'an have entered the listed companies as a whole.
Before this transaction, Shougang held a 51.00% stake in the Steel Trade Company, and the Steel Trade Company held a 29.8177% stake in Jingtang Company. After the completion of this transaction, the listed company will directly hold 100% of the equity of the steel trading company and 100.00% of Jingtang company directly and through the steel trading company. According to the company's output in the first half of 2021, Jingtang Company achieved steel and steel output of 7.66 million tons and 7 million tons respectively in the first half of the year. After the completion of the transaction, the company's equity crude steel output increased by 2.3 million tons, steel production increased by 2.1 million tons.
Profits are expected to increase by more than 1 billion yuan.
In the first half of the year, the steel trading company realized a net profit of 898 million yuan, while Jingtang Company realized a net profit of 2.927 billion yuan. According to 29.8177% of the shares, Jingtang Company contributed 873 million yuan in profit, accounting for 97% of the total. In the first half of the year, the net profit per ton of steel of Jingtang Company was 418 yuan. Based on this, it is estimated that the profit brought by the increased output is close to 900 million yuan. Considering that the company's products continue to advance to the high end, the profit is stable at a high level. Next year, Jingtang base is expected to make a further increase with the sharp decline in raw material prices. After the completion of the transaction and the statement, the profit is expected to increase by more than 1 billion yuan.
The company has entered the performance release stage and is expected to continue to return to shareholders for a long time. The company is committed to the development of high-end product clusters, and the output of strategic products such as electrical steel, automobile plates and tinplate increases steadily. In the future, the proportion of total profits of strategic products is expected to exceed 50%. In addition, the company's cost has entered an inflection point, and the depreciation + amortization of per ton steel and the expense side continue to decline. As a result, the company is expected to continue to maintain high-profit loading.
The company formulates the dividend shareholder return plan for the next three years and will continue to return to shareholders.
Profit forecast and valuation
As the leader of new energy soft magnetic materials (electrical steel) and the head enterprise of high-end industrial plate, the company is expected to benefit from the long-term growth of manufacturing industry and the improvement of profitability brought about by the upgrading of its own products and tapping its internal potential. We estimate that from 2021 to 2023, the company will achieve operating income of 1185.92 billion yuan, 1351.54 billion yuan, 136.506 billion yuan, and return to the mother net profit of 80.02 billion yuan 94.60 PE4.19/3.55/3.24 yuan, corresponding to EPS1.51/1.79/1.96 yuan, corresponding to 2021-2023 PE4.19/3.55/3.24 times. Be optimistic about the future growth of the company and maintain its "buy" rating.
Risk hint: this transaction may be suspended, suspended or cancelled, the price of upstream raw materials has risen sharply, and the implementation of production reduction is not as strong as expected.