The 20-year return net profit fell 30% compared with the same period last year, maintaining the "buy" rating.
On April 22, the company released its 20-year annual report and 21Q1 quarterly report, with a revenue of 2.4 billion yuan (yoy+3%) and a net profit of 220 million yuan (yoy-30%), which was lower than our previous expectation (290 million yuan).
The revenue of 20Q4 is 600 million yuan (yoy+9%, qoq+3%), the net profit of return to mother is 30 million yuan (yoy-56%, qoq-47%), the revenue of 21Q1 is 600 million yuan (yoy+40%, qoq+3%), and the net profit of return to mother is 50 million yuan (yoy-11%, qoq+70%). The impact of the epidemic recedes and the downstream economy is repaired upwards, and the company may benefit. We expect the company's 21-23 EPS to be 0.74, 0.80, 0.83 yuan, maintaining a "buy" rating.
Affected by the epidemic in the past 20 years, product prices and gross profit margin have declined.
According to the company's annual report and operation announcement, the company sold 38600 tons of seamless pipe (yoy-1%) and 33600 tons of welded pipe (yoy+32%) in the past 20 years. Affected by the epidemic, product prices decreased by 1% and 5% respectively compared with the same period last year. The gross profit margin was 17.9% and 19.9% respectively (yoy-7.2pct,-0.7pct), seamless pipe decreased more, or because of the higher proportion of downstream petrochemical and chemical industry, it was more obviously affected by the epidemic. The total pipe sales of 20Q4 Company are 20600 tons (yoy+33%, qoq+13%), the average price is down 14% from the same period last year, and the month-on-month drop is 3%. The total sales volume of 21Q1 is 19900 tons (yoy+64%, qoq-3%), the average price is down 11% from the same period last year, and the month-on-month increase is 7%.
The 20-year comparable caliber expense rate has improved slightly, with a dividend rate of 49%.
The 20-year gross profit margin of the company's sales is 18.3% (yoy-4.7pct, comparable caliber), and the expense rate during the 20-year period is 7.0% (yoy-0.2pct, comparable caliber); sales expenses are 44% lower than the same period last year, mainly due to the adjustment of freight to costs (comparable caliber down 18%), and financial expenses increased by 194% year-on-year, mainly due to the increase in exchange rate losses caused by exchange rate fluctuations; 20-year net sales profit rate 9.2% (yoy-4.4pct). Due to the adjustment of sales expense items in 20Q4 and 21Q1, the gross profit margin and period expense rate are incomparable; the net profit rate of 20Q4 sales is 4.7% (yoy-7.0pct, qoq-4.5pct) and 21Q1 is 7.8% (yoy-4.4pct, qoq+3.1pct). In addition, the company plans to pay 0.27 yuan per share for 20 years, with a cash dividend rate of 49% and a dividend yield of 3.3% (4.22 closing price).
Upstream boom center repair, maintain "buy" rating
The downstream of the company is concentrated in the energy industry, and as the impact of the epidemic recedes and oil prices pick up, the downstream prosperity of the company is expected to be repaired. According to the annual report of three barrels of oil for 20 years, the 21-year capital expenditure plan increased by 9% compared with the same period last year, and the company may benefit. Considering the product cost and price repair under the economic recovery, based on the 20-year operating data of the company, we adjust the relevant price assumptions, and it is estimated that the EPS for 21-22 years is 0.74 won 0.80 yuan (the previous value is 0.83 pm 0.89 yuan), and the EPS for 23 years is 0.83 yuan. The average value of PE (21E), EPS (Wind consensus expectation) of comparable company is 14.95. considering that the product level of the company is slightly lower than that of Jiuli specialty of the same company, the company is given 14x PE (21E), EPS (21E) of 0.74 yuan, and the target price is 10.36 yuan (the previous value is 10.70 yuan), maintaining the "buy" rating.
Risk hint: macroeconomic growth is not as expected; the development of the epidemic is higher than expected.
