In 21 years, the net profit of returning to the mother increased by 55.69% compared with the same period last year. The company released the annual report on April 26th and achieved revenue of 62.75 billion yuan (yoy+29.02%) in 21 years. The net profit of returning to the mother was 3.98 billion yuan (yoy+55.69%), which was consistent with the previous performance of KuaiBao (2022-009). 21Q4 realized a net profit of 620 million yuan (yoy+6.66%,qoq-1.38%). According to the company's 2022 business plan, we adjust the production and sales volume and steel price assumptions. It is estimated that the company's EPS in 22-24 will be 1.43 million 1.45 pounds 1.47 yuan (previous value 2.03 pounds 2.11 pounds), comparable company 2022PE average 4.56x (Wind consensus expectation), considering the company's location advantages, give the company 5.25xPE valuation (2022E), corresponding to the target price 7.51 yuan (previous value 9.94 yuan). Maintain the "overweight" rating. Double carbon "production limit policy affects production and marketing, the company actively promotes cost reduction and efficiency by" double carbon ", strict environmental control and other regulatory policies, the company's steel production and sales declined slightly compared with the same period last year. In 2021, the company achieved crude steel output of 11.4039 million tons (yoy+0.29%), completing 96.4% of the annual plan, steel production of 11.389 million tons (yoy-1.23%), and 97.6% of the annual plan. In 2021, the average steel price of the company is 5151 yuan / ton (yoy+33.30%), the gross profit per ton is 668 yuan / ton (yoy+36.67%), and the gross profit of steel business is 12.97% (yoy+0.32pct). Under the background of production restriction, the company strives to increase the output of variety steel and increase the sales of high value-added products. In addition, the company actively promotes the cost reduction of the whole process. In 2021, Sanming headquarters, Quanzhou Minguang and Luoyuan Minguang have a total cost reduction of 338 million yuan. The expense rate during the company period is 3.46% (yoy-0.49pct), and the net profit rate of sales is 6.37% (yoy+1.1pct).

In the past 22 years, the export of Russia and Ukraine has been restricted and the domestic output of steel dumplings has been adjusted. According to the World Iron and Steel Association, Russia and Ukraine have exported a total of 46.7 million tons of steel in the past 20 years, accounting for 25% of global exports, and under the rise in energy costs, the reduction and shutdown of short-process steel mills in Europe has continued, and the possibility of export orders driving China's steel demand cannot be ruled out. In addition, according to the regular press conference of the National Development and Reform Commission on April 19, the national crude steel output in 2021 was reduced by nearly 30 million tons compared with the same period last year, the task of crude steel production reduction was fully completed, and the national crude steel production reduction work will continue in 2022. The goal is to ensure that national crude steel production will decline in 2022 compared with the same period last year, and there is still a bottom support for industry profits.

The regional leader has the advantage to maintain the "overweight" rating.

The company is the leader of iron and steel in Fujian area, the market share of building materials products in Fujian area is about 51%, the market share of round steel products is more than 70% for a long time, and the market share of medium plate products is stable at more than 80%. And radiation Guangdong, Jiangxi, Zhejiang, Hainan and other neighboring provinces. Fujian Province has a good prospect of regional economic development, or it can fully enjoy the advantage of steel premium brought by location and the advantage of low transportation cost of raw material import. According to the company's business plan for 2022, it is estimated that the company's EPS in 22-24 will be 1.43x1.45x1.47 yuan (the previous value 2.03x2.11max-yuan), which is comparable to the company's average 2022PE value of 4.56x (Wind consensus expectation). Considering the company's location advantages, the company's 5.25xPE valuation (2022E) is given, and the corresponding target price is 7.51yuan (previous value 9.94yuan). Maintain the "overweight" rating. Risk hint: macroeconomic growth is lower than expected, iron ore prices rose more than expected.