The 20-year return net profit fell 41% compared with the same period last year, maintaining the "overweight" rating.
On April 22, the company released its 20-year annual report, with revenue of 48.6 billion yuan (yoy-5%) and net profit of 2.56 billion yuan (yoy-41%) in the past 20 years, which was consistent with the performance of KuaiBao (2021-0.05). 20Q4 realized revenue of 13.4 billion yuan (yoy-4%, qoq+9%) and net profit of 580 million yuan (yoy-41%, qoq-27%).
The company completed the acquisition and merger of Luoyuan Minguang in 20 years, the leading position of the industry in the province has been further consolidated, and the coastal layout has cost advantages, we are optimistic about the development of the company. We expect the company to maintain an "overweight" rating of 1.50 EPS 1.66 USD for 21-23 years.
In the past 20 years, we have actively promoted the cost reduction of the whole process and achieved a reduction of 210 million yuan to increase efficiency. In 20 years, the company's crude steel output was 11.37 million tons (yoy-8%) and steel output was 11.53 million tons (yoy-7%). The year-on-year decline was mainly due to the epidemic situation and the overhaul of No. 6 blast furnace. The average price of steel in the past 20 years is 3390 yuan / ton (yoy-2%), the gross profit per ton is 488 yuan / ton (yoy-20%), and the gross profit margin is 14.4% (yoy-3.4pct).
Over the past 20 years, the company has actively promoted the whole process cost reduction, and Sanming headquarters, Quanzhou Minguang and Luoyuan Minguang have respectively realized cost reduction of 21,25 and 1 yuan per ton per ton, with a total cost reduction of 210 million yuan; in addition, the second phase of Minguang Cloud Merchants has been fully completed and the role of the platform has been strengthened. the purchasing steel business has successfully achieved a positive gross profit margin compared with the same period last year, and the company's position in the local market has been further consolidated.
The 20-year gross profit margin and net profit margin are both down from the same period last year.
In the past 20 years, the company's gross sales margin was 11.7% (yoy-3.2pct), and the expense rate during the period was 3.9% (yoy+1.0pct). The year-on-year increase was mainly due to the company's increased investment in research and development, and the 74% drop in sales expenses compared with the same period last year was mainly due to transportation and handling charges included in costs. Net sales margin 5.3% (yoy-3.2pct). 20Q4's net profit rate on sales is 4.4% (yoy-2.7pct, qoq-2.1pct). In addition, the company plans to pay 0.45 yuan per share in 20 years, with a cash dividend rate of 43% (considering buybacks of 48%) and a dividend yield of 5.1% (4.22 closing price).
Consolidate the regional leading position and maintain the "overweight" rating
The company is the iron and steel leader in Fujian, and has completed the acquisition and merger of Luoyuan Minguang in the past 20 years, the leading position of the industry in the province has been further consolidated, and there are still 1 million tons of production capacity still waiting to be landed. Over the past 21 years of economic recovery, mineral prices remain high while steel prices continue to strengthen, the profits of steel companies may improve, it is optimistic that the company's 21-year net profit will rise compared with the same period last year. Considering that both steel prices and mineral prices are rising under the economic recovery, we adjust the relevant price assumptions and estimate that the EPS for 21-22 years is 1.50 shock 1.66 yuan (the previous value is 1.33 shock 1.48 yuan), and the EPS for 23 years is 1.83 yuan. The average value of PB (21E), BPS (Wind consensus expectation) of comparable company is 1.07times, so the PB (21E), BPS (21E) of comparable company is 9.36yuan, the target price is 10.02yuan (the previous value is 7.46yuan), and the "over-holding" rating is maintained.
Risk hint: macroeconomic growth is lower than expected; iron ore prices rose faster than expected.