Double main business, double bibcock, double base. The company originally engaged in cashmere products, and then invested in the electrometallurgical plate of "local transformation of resources". Among them, cashmere products and ferrosilicon are the first in the world. Cashmere products are located in Dongsheng; electrometallurgical plate is located in chessboard well, the products include ferrosilicon, silicon manganese, PVC, caustic soda, calcium carbide and so on.
Cashmere clothing standard setter and leader. The main producing area of high-quality cashmere is in Inner Mongolia, which makes the company the largest cashmere clothing enterprise in the world, and its revenue in 2017 is about 4 times that of the second in China.
The head effect of cashmere clothing industry is obvious. The competitiveness of the company is enhanced, and the consumption is upgraded, and the income and profit of individual products are gradually improved. And comparable peer income stagnation or decline, the head effect is obvious.
Deep ploughing own brand gains more and more. With the promotion of its own brand for 30 years, the introduction of European designers and the subdivision of brands, the results have gradually become apparent. In the past four years, income and gross profit have increased by 9.33% and 16.13%, respectively.
The 20-year blueprint of the electrometallurgical plate has finally been completed. The second phase of PVC was put into production, and the electrometallurgical blueprint was finally completed. In 2019, the electrometallurgical sector accounted for 80% of the revenue and 60% of the gross profit. Ferrosilicon, cashmere products, PVC gross profit of the top three, a total of about 70%.
In 2019, the company's ferrosilicon ranks first in the world, 4.48 times that of the second in China.
Independent power grids provide thick safety pads. Electricity accounts for about 50% of the cost of the electrometallurgical sector, and the company has won the right to operate independent power generation, mining and generating electricity on its own. In the past three troughs in the industry, the gross profit margin of electrometallurgy fluctuated little. Blue charcoal accounts for about 10% of the cost. Coal, blue charcoal, natural gas, limestone and silica are all produced locally.
This makes the profitability of the electrometallurgical sector of the company has an obvious advantage in comparable companies.
The company is financially healthy. As the major projects have been completed, the cash flow is abundant and the debt ratio is falling rapidly.
increase steadily. Cashmere clothing has entered the harvest period and increased steadily; according to the average gross profit of 2017-2019, PVC brought a gross profit of about 800 million yuan; 2019 financial expenses decreased by 400 million yuan compared with 2018; Matai trench coal mine has obvious potential to increase production; the concentration of industry head is conducive to stable profits; and China's investment recovers quickly.
Profit forecast and valuation. We estimate that the net profit of the company from 2020 to 2021 will be 12.44 yuan and 1.723 billion yuan respectively, the corresponding EPS will be 0.87,1.21 yuan, and the corresponding net assets per share will be 9.51 yuan and 10.51 yuan respectively. We refer to comparable companies, using PE valuation, we give the company 13-14 times PE in 2020, with a reasonable value range of 11.31-12.18 yuan, corresponding to 1.2-1.3 times PB in 2020, giving the company a "better than the market" rating.
Risk hint. The operation of the second phase of the company's PVC project is lower than expected; the company's clothing sales have declined; the domestic economic growth rate has dropped sharply, and the epidemic has repeatedly occurred.
