Results in 2020: an increase of 15.8% in steel sales helped increase revenue and return net profit by 7.9% and 25.1% respectively, and the gross profit of special steel business increased by 32.5%. In 2020, the company realized operating income of 16.6 billion yuan, a year-on-year increase of 7.9%, a net profit of 2.14 billion yuan, an increase of 25.1% over the same period last year, and a non-net profit of 2.05 billion yuan, an increase of 25.0% over the same period last year, and earnings per share of 0.99 yuan per share diluted by, ROE () was 23.5%. (1) Business structure: the proportion of revenue and gross profit of General Steel is 72.0% and 58.0% respectively, the proportion of revenue of special steel is slightly reduced to 21.5%, and the gross profit of special steel driven by automobile leaf spring increases by 6.1PCT to 24.4%. (2) profitability: the decline in steel price dragged down the gross margin per ton of steel, the prosperity of supply and demand, the decrease of cost helped the gross profit per ton of iron concentrate to increase greatly, and the reduction of equity incentive fees greatly reduced the expenses during the period. (3) Operation quality: the operation ability is relatively stable, and the ability to obtain cash and repay debt is improved. (4) Environmental protection governance: continue to improve environmental protection, adhere to the 2021 plan for ultra-low emissions and green development: in 2021, the company's planned production and sales of steel and leaf springs will decline by 5.4% and 2.6% compared with the same period last year, and continue to promote the "Putter combination, innovation-driven" development strategy.
The focus of the company: the company has both universal and special steel, strong cost management and control ability, obvious location advantage in Jiangxi province, obvious leading position of three special steel, and ranks first in domestic market share of special steel varieties such as spring flat steel and automobile leaf spring. Technology research and development and product upgrading inject new driving force into the company's sustainable development.
The cumulative cash dividend ratio in 2010-2019 ranks second in Shenwan Iron and Steel sector. PB_LF 's valuation is currently at 38.6% of the 2011-to-date data.
Profit Forecast and Investment suggestion: it is estimated that the company's EPS for 21-23 will be 1.52, 1.82, and 2.03 yuan per share, corresponding to the closing price on April 12, 21, and the PE for 21-23 will be 6.19, 5.16, 4.63 times.
We use the segment valuation method to value the fair value of about 14.23 yuan per share and maintain a "buy" rating corresponding to 9.36 times PE, in 2021.
Risk tips. Macroeconomic repair is not as expected; global inflation is higher than expected; mainstream mineral production is completed, non-mainstream mine production is not as expected; COVID-19 vaccination progress is lower than expected; planned output completion is lower than expected.