The operation is sound, and the performance is slightly lower than the previous month. In 2021, the company will conscientiously implement the policies of limiting production and electricity, actively co-ordinate production and operation, organize production according to variety and benefit differentiation, and constantly expand procurement channels to deal with the adverse impact of rising raw fuel prices. In 2021, the total operating income was 62.753 billion yuan, an increase of 29.02% over the same period last year. The net profit belonging to shareholders of listed companies was 3.979 billion yuan, an increase of 55.69% over the same period last year.
In the first quarter, the company achieved operating income of 12.841 billion yuan, down 8.91% from the previous month; net profit belonging to shareholders of listed companies was 532 million yuan, down 14.24% from the previous month.
Regional leader, the price of the product is higher than that of the surrounding cities. The company has an annual steel production capacity of more than 12 million tons. In 2021, the company produced 11.4 million tons of steel, an increase of 0.29% over the same period last year. The company deeply penetrates the Fujian market and radiates the surrounding provinces. Benefiting from the advantages of regional economic development and the booming demand for steel, the sales price of products has been higher than that of the surrounding cities for a long time. In 2021, the average price of rebar and medium plate in Fuzhou is 44 yuan / ton and 228 yuan / ton higher than that in Shanghai.
Reduce costs and increase efficiency, and tap potential in depth. In terms of cost reduction, the company focuses on strengthening production coordination and supply and marketing management, and continues to promote the whole process of cost reduction in each base. In terms of transformation and upgrading, the company's capacity replacement and upgrading project has been continuously promoted, and the construction of the second phase of coke oven upgrading, Xinxin blast furnace, billet continuous caster and medium bar production line will continue to be launched in 2022, and the main iron and steel industry will continue to strengthen development.
A high proportion of cash dividends are paid to shareholders. The company plans to distribute a cash dividend of 8.2 yuan (including tax) for every 10 shares of all shareholders. It is estimated that the cash dividend of the company will be 1.992 billion yuan in 2021, accounting for 50.06% of the net profit of shareholders belonging to listed companies in the consolidated statement of 2021. Corresponding to the closing price on April 27, 2022, the dividend yield reached 11.9%.
Rough steel superimposed steady growth, the iron and steel industry is expected to maintain a stable operation. In April, the commission needle was changed to make a clear statement to ensure that the national crude steel output decreased in 2022 compared with the same period last year. For crude steel production pressure drop will help the industry to maintain a stable operation, but also help to curb iron ore prices, black industry chain profits are expected to tilt to the steel mill end again. At the same time, demand-side real estate in order to prevent the risk of hard landing, local property market regulation and control policies tend to be liberalized, and the policy continues to increase, helping to improve market sentiment. The growth rate of infrastructure investment is also expected to stabilize with the policy of stabilizing growth, which in turn drives steel consumption and plays a role of counter-cyclical adjustment.
Risk tips: demand-side decline in excess of expectations; crude steel production reduction policy landed less than expected; raw material price fluctuations exceeded expectations.
Investment advice: the company as a regional leader, products enjoy market premium, steady dividend. Considering the high price of raw materials, we lowered our performance forecast. It is estimated that the company's 2022-2024 net profit from the return to the parent will be 32.8 / 3.49 billion yuan (the original forecast is 41.6), with a year-on-year growth rate of-17.5%, 2.5% and 3.6%, and the diluted EPS of 1.34, 1.37 and 1.42 yuan, while the current share price corresponds to a PE of 5.1, 5.0 and 4.8x, maintaining the "overweight" rating.