Summary of events: on August 17, the company released its semi-annual report of 2022: in the first half of 2022, the company achieved revenue of 2.747 billion yuan, an increase of 40.38% over the same period last year; net profit of 180 million yuan, up 83.43% over the same period last year; and 175 million yuan of non-return net profit, an increase of 653.59% over the same period last year. 2022Q2, the company achieved revenue of 1.664 billion yuan, an increase of 56.95% over the same period last year, an increase of 53.57% over the same period last year; the net profit of returning to the mother was 141 million yuan, an increase of 65.29% over the same period last year, an increase of 261.59%; and the net profit of non-return was 142 million yuan, an increase of 1288.37% over the same period last year and 330.75% over the same period last year.
Comments: PQF put into production to boost the company's production, gross profit margin significantly rebounded ① volume: 2022H1 sales increased significantly compared with the same period last year. The company's PQF production line has been put into trial operation on June 18, 2021, and the annual pipe production capacity of the company will reach 1 million tons. The price of 2022H1 seamless steel pipe increased by 4.13% year-on-year, while the company's revenue increased by 40.38% year-on-year, reflecting a significant increase in product sales.
② price: 2022H1 gross profit margin increased compared with the same period last year. The price of 2022H1 raw materials fell 3.69% year-on-year, while the price of seamless steel pipe increased 4.13% year-on-year, making the company's gross profit margin increased by 4.45pct to 11.89% year-on-year, of which oil casing and boiler pipe gross profit margins were 16.62% (year-on-year + 7.77pct) and 16.45% (year-on-year + 9.38pct). Q2 company gross profit margin is 12.57%, month-on-month increase in 1.41pct, year-on-year increase in 1.72pct.
③ 2022Q2's homing net profit increased year-on-year. From a month-on-month point of view, the company's profit growth is mainly due to the increase in product sales and gross profit margin in the second quarter; from a year-on-year point of view, due to the decline in the price of raw materials and the relatively strong price of seamless steel pipe, the company's gross profit margin has increased somewhat, superimposed demand in the oil industry has picked up, and the company's new project production capacity has reached production, Q2 homing net profit increased by 56 million yuan compared with the same period last year.
Future core focus: seize the opportunity of oil and gas market recovery, accelerate production capacity release ① oil and gas market demand pick up. With the resonant recovery of the global economy and the strong pick-up in crude oil demand, the long-term boom in oil prices in 2022 is expected to support oil and gas pipe demand. The company focuses on foreign market development and certification, and actively expand overseas markets. The business income of 2022H1 pipe products increased by 40.38% compared with the same period last year, while the overseas business income with a higher gross profit margin increased by 137%.
② refocuses on the main industry of energy pipe, and the company's advanced production capacity continues to be released. In the past 21 years, the company has sold its medical assets as a whole, returned to the main line of energy pipe business, and achieved rapid growth. The company's high-end PQF production line has been put into trial operation on June 18, 2021, and after reaching production, the company's annual pipe production capacity will reach 1 million tons. Under the background of good downstream demand, the company's sales of 22H1 casing, piping and other products have increased significantly compared with the same period last year.
Profit forecast and investment advice: we believe that, benefiting from the rising demand in the oil and gas industry, the continuous release of new production capacity and the downward price of raw materials, the company's steel pipe product sales and gross profit margin are expected to increase. The 2022-24 net profit is expected to be 345x45x505 million, corresponding to the August 19 closing price of PE is 15x, 12x and 10x, the first coverage, given the "recommended" rating.
Risk tips: rising prices of raw materials, lower-than-expected downstream demand, lower-than-expected production capacity, the continued impact of the COVID-19 epidemic.