Summary of events: the company issued 2021 annual report: in 2021, the company achieved revenue of 4.652 billion yuan, an increase of 31.4% over the same period last year; net profit of 1.085 billion yuan, up 98.1% over the same period last year; and 774 million yuan of non-return net profit, an increase of 101.4% over the same period last year. 2021Q4, the company achieved revenue of 1.083 billion yuan, an increase of 15.4% over the same period last year, a decrease of 10%; a net profit of 211 million yuan, an increase of 43.6% over the same period last year, a decrease of 43.1%; and a net profit of 81 million yuan, an increase of 249.4% over the same period last year and a decrease of 65.3%. The performance is in line with expectations.
Comments:
① volume: sales of carbon products increased by 7.35% in 2021 compared with the same period last year. The company's output of carbon products increased slightly. In 2021, the output of carbon products was 196300 tons, + 5.25% compared with the same period last year, and the sales volume of carbon products was 197900 tons, + 7.35% year-on-year.
In terms of iron concentrate, the company produced 452800 tons of iron concentrate in 2021,-7.83% of the same period last year. Due to a sharp drop in iron ore prices in the second half of 2021, we judged that the company controlled the sales of iron concentrate in the third and fourth quarters. The company's sales of iron concentrate in 2021 were only 319000 tons, compared with-36.49% last year, and the final inventory of iron concentrate increased to 135100 tons.
② price: graphite electrode price rebounded at the bottom, and gross profit margin rose 4.80pct to 33.51% in 2021. The supply and demand pattern of the graphite electrode industry gradually improved, and the price bottom rebounded. In 2021, the average price of ultra-high power graphite electrode was + 14.67% compared with the same period last year. Although the price of raw materials increased more (needle coke price + 55.92%, petroleum coke price + 87.11%), due to the company's distribution of raw material production capacity, the equity raw material self-sufficiency rate was close to 60%, the company effectively ironed out the risk of raw material price fluctuation, and the company's gross profit margin increased 4.80pct in 2021. To 33.51%. Quarter by quarter, 21Q4 graphite electrode prices continue to rise, the company's gross profit margin increased 1.75pct, to 35.27%.
The core points of the future:
① "double carbon" opens the demand space, and capacity approval tightens to boost the price of graphite electrodes for a long time. In order to effectively reduce carbon emissions in the iron and steel industry, the policy encourages the proportion of electric furnace steel to increase, and the industry has a broad demand space. Graphite electrode itself is a high energy-consuming industry, affected by policies such as double control of energy consumption, some provinces and cities have issued policies to restrict the examination and approval of medium-and low-end production capacity, the inflection point of the industry has gradually emerged, and the price of graphite electrode is expected to rise for a long time.
② ultra-high power graphite electrode project has been put into production one after another, and the low position of the leader is more stable. The company has a production capacity of 214000 tons of graphite electrodes (including 49000 tons of Baofang carbon materials) and 30,000 tons of carbon bricks, which is in a leading position in China.
With the relocation project of 50, 000 tons of carbon in Hefei, the 50, 000-ton new project of Meishan Fangda, the 25000-ton relocation project of Chengdu Rongguang, and the 30,000-ton special graphite project of Chengdu, the leading position is more stable. In terms of product structure, as the graphite electrode project is mainly a series of ultra-high power products, the proportion of the company's high-end graphite electrode products will be further enhanced in the future.
Investment suggestion: a number of projects under construction in the company gradually release production capacity, the fundamentals of the graphite electrode industry are about to appear an inflection point, the price of graphite electrodes is expected to rise for a long time, and the company's performance release is expected. We estimate that the company's net profit from 2022 to 2024 will be 15.75 yuan, 21.91 billion yuan, corresponding to the closing price of 7.34 yuan on April 22, 2022, and the PE in 2022-2024 will be multiple of 18-13-10, maintaining the company's "recommended" rating.
Risk hint: the development of electric furnace steelmaking is not as expected; the progress of the project is not as expected; the price of raw materials fluctuates greatly.