This report is read as follows:
The company's performance in the first half of 2022 was slightly lower than expected. Under the cost pressure, the company will gradually increase its output in the second half of the year, and its performance is expected to continue to rise.
Main points of investment:
Maintain the "overweight" rating. The company's revenue in the first half of 2022 was 2.671 billion yuan, up 12.98% from the same period last year; the net profit was 341 million yuan, down 32.14% from the same period last year, and the company's performance was slightly lower than expected. Taking into account the impact of cost on the company's performance, the company's eps in 2022-24 is estimated to be 0.41 yuan 0.46 yuan (the original 0.36 yuan 0.44 yuan 0.49 yuan), and the corresponding net profit is 10.76 billion yuan 15.58 million yuan respectively. Taking into account the decline in the valuation level of similar companies, refer to similar companies, give the company a valuation of 30 times PE in 2022, lower the company's target price to 8.4 yuan (formerly 10.8 yuan), and maintain the "overweight" rating.
In order to change, the performance rebounded rapidly in the second quarter. In 22 years, the net profits of Q1 and Q2 companies were 0.34 yuan and 307 million yuan respectively. Under the background of rising costs and downward profits of downstream electric furnace steel, the company quickly recovered its performance in the second quarter with strain change and stable price. Real estate demand hit bottom, infrastructure demand is strong, it is expected that the steel industry demand will gradually rise, graphite electrode demand will pick up, the company's performance will gradually rise.
Output continues to rise, and there is a broad space for long-term development. In the first half of 2022, Meishan Rongguang carbon production capacity of 50,000 tons, Changfeng Fang large production capacity of 50,000 tons, both are ultra-high power graphite electrode projects. The company's output may continue to increase in 2022, and the product structure will be further optimized. In the long run, the demand for graphite electrodes in EAF steelmaking will increase steadily, and the demand for graphite electrodes in the industry will continue to rise.
Environmental protection and other factors promote the increase of industry concentration. The China carbon Industry Association issued the "calculation method of carbon dioxide emissions from carbon products" in 2021, and the environmental protection requirements of the carbon industry are gradually increasing.
We expect that environmental protection and other factors will gradually promote the elimination of backward production capacity in the industry, and the concentration of the carbon industry will be further increased. As a leading enterprise in the carbon industry, the company will benefit from the improvement of industry concentration.
Risk hint: profits in the iron and steel industry fell more than expected.