This report is read as follows:
The company's performance in 2021 is in line with expectations. Steel prices rose sharply, COVID-19 epidemic constrained demand, the company's profit per ton of products declined. It is expected that the 22-year cost rise will slow down, and demand will pick up under steady growth, and the company's performance will be released steadily.
Main points of investment:
Maintain the "overweight" rating. In 2021, the company achieved operating income of 66.866 billion yuan, an increase of 38.1% over the same period last year, and a net profit of 614 million yuan, a decrease of 46.28% over the same period last year. Maintain the forecast of the company's EPS of 0.79 yuan and 0.84 yuan from 2022 to 2023, increase the forecast of EPS for 2024 to 0.92 yuan, corresponding to the 22-24 year net profit of homing is 1.336 pound 1.325 billion yuan respectively.
Maintain the company's target price of 11.67 yuan and maintain the "overweight" rating.
Costs are a drag on profits and may ease gradually. In 2021, the company's steel pipe sales were 12.0669 million tons, up 1.72% from the same period last year. The company's steel pipe sales have increased for three consecutive years, and its leading position in the industry is solid. Affected by the sharp rise in upstream steel prices, the price of the company's products followed the rise, but the acceptance of downstream customers was slow. The gross profit of the company's products per ton decreased by 50 yuan / ton to 140 yuan / ton compared with 20 years, and the net profit of the corresponding ton product decreased by 45 yuan / ton to 51 yuan / ton. Over the past 22 years, the upstream steel price of the company has slowed down, and we expect the company's cost-side pressure to improve gradually in 22 years, and the company's profitability will gradually increase.
The national layout strategy continues to be implemented, and the strength of the company increases steadily. In 2021, the company continues to promote the construction of Jiangsu Youfa and Tangshan Youfa. At present, the first phase of Jiangsu Youfa has been put into production and the second phase has been started. Tangshan Youfa's main products are plate buckle scaffolding, which is a reasonable extension of the company to the downstream. Jiangsu Youfa has the largest production capacity of 3 million tons of welded pipe in East China, while Tangshan Youfa scaffolding business will enhance the added value of the company's products and enhance the company's overall profitability. We expect the company's strength to increase steadily.
Pipeline demand may exceed expectations. The documents issued by three ministries, including the Ministry of Housing and Construction and the background of steady growth, clearly regard old pipelines as priority projects for the renovation of old residential areas, and we expect that aging pipelines in cities will be upgraded and renovated. As a domestic steel pipe leader, the company will fully benefit from the rise in downstream demand.
Risk Tip: steel prices rise sharply, dealers manage risks.