维持“增持”评级。 2023 年上半年公司实现营业收入220.89 亿元，同比下降11.69%；实现净利润2.82 亿元，同比下降76.46%。考虑钢铁行业需求仍偏弱，成本端继续承压，我们下调公司2023-2025 年净利润预测为9.37、10.94、12.63 亿元人民币（原13.10/15.32/17.31 亿元人民币）。Introduction to this report:
The company's gross profit per ton of steel rebounded quarter by quarter in 2023, reflecting its excellent cost management capabilities. The company sells underutilized steel production capacity and continues to expand downstream power transmission equipment business to improve overall resource allocation efficiency.
Summary:
Maintain the “Overweight” rating. In the first half of 2023, the company achieved operating income of 22.089 billion yuan, a year-on-year decrease of 11.69%; net profit of 282 million yuan, a year-on-year decrease of 76.46%. Considering that demand in the steel industry is still weak and the cost side continues to be under pressure, we lowered the company's net profit forecast for 2023-2025 to 9.37, 10.94, and 1,263 billion yuan (previously 13.10/15.32/1,731 billion yuan).
Profitability levels are picking up quarter by quarter. According to the company announcement, in the first to third quarters of 2023, the company's steel product sales volume was 2.2, 168, and 1.9 million tons, respectively, about 5.78 million tons, an increase of 12.84% over the previous year; the company's profit level rebounded quarter by quarter. The gross profit of the tonne steel of the 2023Q1 company did not exceed 100 yuan/ton, the gross profit of the 2023H1 company rose to 145 yuan/ton, and the gross profit of the 2023Q3 company rose further to 150-200 yuan/ton. Against the backdrop of weak demand and continued pressure on industry profits, the company's profit level has rebounded quarter by quarter, which indirectly reflects its excellent cost management capabilities.
Rationally dispose of underutilized steel production capacity and improve the company's overall resource allocation efficiency. On August 24, 2023, the company announced that its indirect subsidiary Jinxi Steel will sell its underutilized iron production capacity of 1.08 million tons/year to Tangshan Guotang for 81 million yuan (including VAT); the company's net proceeds from the sale of iron production capacity will mainly be used for its general operating capital and future business opportunity financing, which will help the company coordinate and improve its resource allocation efficiency.
Continue to develop downstream power transmission equipment business and strengthen collaboration with steel business. As of the end of the third quarter of 2023, Jinxi Steel, an indirect subsidiary of the company, and Tianjin Ansai, an indirect subsidiary of the company, held a total of 40.5% of Huijintong's shares and was the actual controller of Huijintong. Huijintong is mainly engaged in R&D, manufacturing and sales of power transmission equipment. Currently, it operates a production plant with a total annual production capacity of about 450,000 tons in China. On June 13, 2023, Huijintong's wholly-owned subsidiary Qingdao Huadian and Huijintong passed resolutions to increase the capital of Chongqing Jiangdian by 450 million yuan and Chongqing Deyang by 150 million yuan, respectively, to strengthen the capital structure of Chongqing Jiangdian and Chongqing Deyang and help them expand the scale of operations. The company's continued expansion of the downstream power transmission equipment business will also help to better realize the synergy between the steel business and downstream.
Risk warning: Industry demand has declined sharply, and raw material prices have risen sharply.