Event

The company releases its first quarterly report for 2021

The first quarterly report of 2021 officially disclosed that the total operating income was 6.761 billion yuan, an increase of 55.4% over the same period last year, and the net profit returned to its mother was 690 million yuan, an increase of 502.5% over the same period last year, with a basic EPS of 0.48 yuan.

Brief comment

Significant achievements have been made in reducing costs and increasing efficiency, and income and profits have increased significantly.

Thanks to the company's efforts in reducing costs and fees, the company's gross profit margin in the first quarter was 33.2%, up 5.7 pct from the same period last year, and the rates of sales, management and financial expenses were 8.6%, 4.0% and 2.5%, respectively, declining 1.5pct, 2.5pct and 3.8 pct over the same period last year. Under the premise of a substantial increase in revenue, through cost reduction and cost reduction, the net profit returned to the mother reached six times that of the same period last year.

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, but the price of PVC is still at a historically high position, 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-provided power plants will be eliminated. The company has coal and self-provided power plants with a power cost of 0.25 yuan, which has a great cost advantage and can benefit from the large environment of capacity loss.

Polysilicon plate stop loss, this year has become a new momentum of profit growth.

In recent years, the new energy photovoltaic industry has maintained a high demeanor, and the company's polysilicon company's losses have narrowed, from 465 million losses in 2019 to 46 million last year. It is expected to reverse losses and contribute new profit increments this year.

Profit forecast and investment advice: we predict that the return net profit of Ordos from 2021 to 2023 is 3.611 billion, 5.263 billion and 6.966 billion respectively, the EPS is 2.53,3.69,4.88 yuan per share, and the corresponding PE is 7.3,5.0and 3.8times respectively, maintaining the "buy" rating.

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