This report is read as follows:
The volume and profit of the company has risen in 21 years, and the performance of 2022Q1 has been adversely affected. The company is a leading steel enterprise in Fujian, with excellent management ability. In the future, the company will adhere to the fine management strategy and improve its profitability.
Main points of investment:
Maintain the "overweight" rating. In 2021, 2022Q1 achieved revenue of 628 yuan and 12.8 billion yuan, up 29.02% and 11.58% respectively over the same period last year, and realized net profit of 39.79 yuan and 532 million yuan, up 55.69% and 42.39% respectively over the same period last year. Taking into account the sharp rise in raw material prices and the epidemic situation and other factors, the company's EPS in 22-23 is estimated to be 1.68 yuan 1.71 yuan (the original 1.74 shock 1.78 yuan), and the 24-year EPS is estimated to be 1.76 yuan, corresponding to 41.07 shock 41.93 / 4.304 billion yuan in 22-24 years. Maintain the company's target price of 10.08 yuan and maintain the "overweight" rating.
Volume and profit will rise in 2021, and the performance of 2022Q1 will be adversely affected. In 2021, the company's crude steel output was 11.4039 million tons, an increase of 0.29% over the same period last year; the company's gross profit margin and net profit margin rose 0.61% and 1.1% respectively over the same period last year. 2022Q1's crude steel output was 2.53 million tons, down 16.59% from the same period last year. Superimposed raw material prices rose sharply, leading to a short-term decline in the company's performance.
The ability of cost control is outstanding, and the results of reducing cost and increasing efficiency are remarkable. In the past 21 years, the company's Sanming headquarters, Quanzhou Minguang and Luoyuan Minguang bases have realized cost reduction of 33.08,34.47,10.6 yuan per ton respectively, with a total cost reduction of 338 million yuan. In 22 years, the company will continue to implement fine management, and strive to reduce the cost of Sanming headquarters, Quanzhou Minguang and Luoyuan Minguang by 35 yuan, 43 yuan and 10 yuan per ton respectively, and the company's profitability will be further improved.
The position of regional leader is stable, and the advantage of product premium is significant. 75% of the company's products are sold in Fujian Province, and the provincial market share of building materials, medium plate and round steel is as high as 51%, 80% and 70% respectively. The average price of the company's building materials and general board in Fujian Province is 29,188 yuan / ton higher than that of the "surrounding four places" (Shanghai, Hangzhou, Nanchang and Guangzhou), and the average price of round steel in the province is 49 yuan / ton higher than that of the surrounding markets (Hangzhou and Guangzhou). The company's products have a strong premium advantage in Fujian Province.
Risk tips: a sharp decline in the macro-economy; a sharp drop in downstream steel demand.