Event

The company publishes its annual report for 2020

The 2020 annual report officially disclosed that the total operating income was 23.141 billion yuan, an increase of 1.4% over the same period last year, and the net profit was 1.528 billion yuan, an increase of 14.4% over the same period last year. The basic EPS was 1.07 yuan, and the average ROE was 11.63%.

Brief comment

The second phase of PVC was put into production smoothly, and the volume profit increased and contributed to the performance increment.

The first phase of the company's PVC has a production capacity of 400000 tons, and the second phase has reached 800000 tons after it was successfully put into production.

In 2020, due to the incomplete release of production in the middle of the year, the output has increased from 460000 tons to 710000 tons, while the gross profit per ton has increased from 1745 to 2130 yuan, contributing to the largest performance increment of the year. The full output of PVC in 2021 is estimated to reach about 900000 tons, and the superimposed price will rise, and the chlor-alkali chemical industry will continue to maintain a bright growth rate.

Ferro-silicon and manganese remain stable and have great elasticity in the background of carbon neutralization.

The output of ferrosilicon in 2020 was 1.47 million tons (- 120000 tons), which decreased slightly during the whole year affected by the epidemic, but the price was low before and after the high, the average price increased slightly, and the gross profit remained around 1.7 billion as a whole, which was basically stable. Under the background of carbon neutralization, ferrosilicon, as one of the industries with the highest energy consumption per unit GDP, must be the key target of eliminating production capacity. It is inevitable that some small furnaces without self-owned power plants will be eliminated, and ferrosilicon will make a huge profit.

Clothing plate is greatly affected by the epidemic, polysilicon plate stop loss.

Affected by the epidemic, sales in the clothing sector fell by 14%, and gross profit fell by 150 million, slightly affected. In addition, benefiting from the high demeanor of the new energy photovoltaic industry, the polysilicon company at the bleeding point has narrowed its losses, from 465 million in 2019 to 46 million this year, and is expected to contribute new profit increases in 2021.

The dividend payout rate is 75%, and the dividend yield is 5%.

The company announced a dividend plan of 8 yuan for every 10 shares, with a dividend payout rate of 75% and a dividend rate of 5%. Large dividends will be paid back to shareholders.

Profit forecast and investment advice: we predict that the return net profit of Ordos from 2021 to 2023 is 3.536 billion, 5.297 billion and 6.997 billion respectively, the EPS is 2.48,3.71,4.90 yuan per share respectively, and the corresponding PE is 6.2,4.1 and 3.1 times respectively.

Rating.

Risk hint: the implementation of the policy is not as strong as expected.