Summary of events: on February 2, the company released its 2022 results KuaiBao: in 2022, the company achieved a total operating income of 2.83 billion yuan, an increase of 4.86% over the same period last year, and a net profit of 215 million yuan, an increase of 22.02% over the same period last year. 2022Q4, the company achieved a total operating income of 792 million yuan, an increase of 13.11% over the same period last year, an increase of 2.81% over the previous year; and a net profit of 72 million yuan, an increase of 271.42% and 18.46% over the same period last year.
Comments: the increase in profit per ton offset the impact of the decline in sales, and the company achieved double growth in revenue and net profit.
① volume: product sales decreased in 2022 compared with the same period last year. The company's 2022 seamless pipe sales of 46200 tons, down 7.23% from the same period last year, welded pipe sales of 28800 tons, down 22.80%, mainly due to the impact of the epidemic in the first quarter, the proportion of sales of high-end products with higher superimposed production process requirements increased.
② price: the average product price and profit per ton increased in 2022 compared with the same period last year. In 2022, the average sales price of seamless pipe was 40991.68 yuan / ton, an increase of 18.26% over the same period last year, and the average price of welded pipe was 27628.56 yuan / ton, an increase of 14.94% over the same period last year. The company promotes the sales of high-end products such as thermal power boiler tubes, strengthens cost control, increases profits per ton of steel, and achieves both business income and net profit growth.
Core focus in the future: seize the opportunity of thermal power demand recovery and improve the profitability of high-end pipe leaders
The approved amount of ① coal power has greatly increased, and the supply and demand of super stainless steel pipes is tight. Experts expect the subsequent annual approval of about 80 million kilowatts (equivalent to 80GW), which will bring 200 million kilowatts of additional installed capacity in the next three years. The demand for superimposed super stainless steel seamless tubes will increase from 38100 tons to 100000 tons in 2021-25, with a CAGR of 27.32%, with a substantial increase in demand. As the top pipe of ultra-supercritical units, S30432 and HR3C have high supply barriers, so it is difficult for new manufacturers to quickly cut into the boiler plant supply system, and the supply elasticity is limited, which is expected to support the price of thermal power boiler tubes.
② is actively increasing production and seizing the opportunity of market recovery. The company is one of the leading enterprises in the domestic stainless steel pipe industry and the first domestic supplier of S30432. The company has an original production capacity of 10,000 tons of thermal power boiler tubes, and began to invest 470 million yuan to build a high-end stainless steel pipe project with an annual production capacity of 20,000 tons in 2020. it is expected that it will be able to carry out production in May 2023 and achieve sales of 30,000 tons in 2024. The introduction of new capacity will help the company seize the opportunity of recovery in thermal power demand and improve profitability.
The localization of ③ cracking furnace tube is the trend of the times, and the leading position of precision tube industry is consolidated. According to Huajing Information Network, the market scale of ethylene cracking furnace and high temperature furnace tube in China is expected to expand steadily, but there is no high temperature lasting data for domestic furnace tube at present. The company has jointly established a project with a domestic petrochemical giant to realize the localization of the furnace tube in the convection section of the ethylene cracking furnace. In addition, the company continues to forge ahead after the 3500-ton precision pipe production line is put into production, further building a moat for the company's high profitability.
Profit forecast and investment advice: we believe that, benefiting from the reversal in demand in the thermal power boiler tube industry + the increase in the proportion of high-end products and the superimposed release of new capacity, the company's net profit for 2022-24 is expected to be 2.15 million 3.91 million, corresponding to the closing price of 25x, 14x and 9x, maintaining the "recommended" rating.
Risk hint: raw material prices rise, downstream demand is lower than expected, capacity release is not as expected.
