Main events: the company released its quarterly report for 2021, with a total operating income of 4.04 billion yuan, an increase of 27% over the same period last year; a net profit of 550 million yuan belonging to shareholders of listed companies, an increase of 104% over the same period last year, and-14% from the fourth quarter; realized net profit of 540 million yuan after deducting non-recurring profits and losses belonging to shareholders of listed companies, an increase of 99% over the same period last year. EPS0.26 yuan.
Ton steel data: according to the company announcement, the company sold 890000 tons of iron and steel products in the first quarter, unchanged from the same period last year,-26% compared with the fourth quarter, mainly due to the off-season, with a converted price of 4331 yuan per ton, operating cost of 3520 yuan per ton, gross profit of 812 yuan per ton, year-on-year sales of + 863 yuan / ton, + 651 yuan / ton, + 212yuan / ton respectively, and + 512 yuan / ton, + 547 yuan / ton,-35 yuan / ton respectively compared with the fourth quarter. Iron concentrate sales volume of 154000 tons, year-on-year + 53%, month-on-month ratio-15%, converted price 1133 yuan / ton, ton operating cost 205 yuan / ton, ton gross profit 928 yuan / ton, respectively, year-on-year + 426 yuan / ton,-10 yuan / ton, + 435 yuan / ton, quarter-on-quarter respectively + 234 yuan / ton, + 19 yuan / ton, + 215 yuan / ton.
The company's performance is basically consistent with the overall trend of the industry: the gross profit per ton of rebar measured by us with spot prices has dropped by about 150 yuan / ton, but in fact, many listed iron and steel companies have greatly exceeded expectations in the first quarter. there are two reasons: first, the inventory of low-priced raw materials increased in the early period; second, coking profits peaked in the first quarter, and enterprises with high coke self-sufficiency rate benefited more. Of course, after March, due to production restrictions in Tangshan, profits per ton of steel also rebounded significantly. The company's gross profit of tons in the first quarter is slightly lower than that in the fourth quarter, which is basically in line with the trend of the industry. The above two factors also benefit the company, which forms a hedge against the decline in gross profit per ton of the industry, but the company benefits slightly less than those with high inventory of raw materials and higher coke self-sufficiency rate. Iron ore continued a high boom in the first quarter, with year-on-year growth in sales and prices, contributing to the company's incremental performance.
Pay attention to the "square-style" M & An expansion; in 2020, the company announced that the controlling shareholder, Fang Da Iron and Steel Group, will participate in the restructuring investment of Shente iron and steel enterprises from the strategic consideration of supporting the development of the iron and steel industry.
At the same time, Fangda Iron and Steel Group promises that if Fangda Iron and Steel successfully invests in Shente enterprises, it will inject Shente enterprises into listed companies under the condition of complying with laws and regulations and meeting the requirements of compliance and profitability. After years of iron and steel business operation, Fangda has formed an efficient business model with its own characteristics. Through M & An expansion, inefficient target assets can be transformed into iron and steel assets with leading efficiency and strong profitability. To achieve the replication of the "Fangda model", as well as the continuous growth of enterprises, listed companies are expected to benefit from it.
Investment advice: coking and inventory appreciation, which support the performance of most steel companies in the first quarter, may weaken in the second quarter, but steel smelting profits per ton will rise sharply due to production restrictions in Tangshan. Therefore, enterprises with low benefits from coking and inventory appreciation in the first quarter are more likely to exceed expectations in the second quarter, and the company should belong to this type. at present, the profit per ton of steel in the industry has returned to near the 2018 peak, so the company's performance is expected to show significant growth in the second quarter. As a large and medium-sized iron and steel production group in Jiangxi Province, the company's products are mainly rebar, wire rod and other construction steel products, and its spring flat steel and auto parts also occupy an important position in the market segment. In addition, as a typical representative of private steel enterprises in the industry, its efficient and flexible management mechanism is expected to promote its continuous cost reduction and efficiency, and will benefit from the continuous M & An expansion of the controlling shareholders.
In the 2020 Annual report, the company returned to a large proportion of cash dividends, reflecting the company's excellent cash flow and efforts to return shareholders to maintain its "overweight" rating.
Risk hints: the sharp macroeconomic downturn leads to pressure on steel demand; the release of industry supply exceeds expectations; and the public information used in the research report may lag behind or not be updated in a timely manner.