Event: on April 29, 2021, the company issued the following announcement: 1) operating income reached 8.79 billion yuan in 2020, down 8.09% from the same period last year; net profit belonging to shareholders of listed companies was 333 million yuan, down 27.13% from the same period last year. 2) the operating income in the first quarter was 2.646 billion yuan, an increase of 71.95% over the same period last year; the net profit belonging to shareholders of listed companies was 255 million yuan, compared with a loss of 8.8713 million yuan in the same period last year. 3) it is planned to acquire the relevant shares, assets and liabilities of Xintai Iron and Steel and its subsidiaries from the controlling shareholder in cash, and the transaction is expected to constitute a major asset restructuring.
Comment
The performance was in line with expectations: the net profit belonging to shareholders of listed companies in 2020 was 333 million yuan, down 27.13% from the same period last year. The net profit attributed to shareholders of listed companies in the first quarter was 255 million yuan, a year-on-year turnround, and the overall performance was in line with expectations.
The epidemic affected production and marketing, and prices declined slightly: affected by COVID-19 's epidemic situation in 2020, the company limited production to varying degrees. The production and sales of section steel and coke decreased by 2.2763 million tons over the same period last year, down 1.25% from the same period last year. Coke sales decreased by 2.2855 million tons, down 1.9% from the same period last year, the selling price per ton of coke was 1580.31 yuan, down 3.05% from the same period last year, and the gross profit margin of coke was 18.57%. An increase of 7.46 percentage points over the same period last year. In 2020, the company produced 1.3182 million tons of section steel, down 9.09% from the same period last year, and sold 1.3402 million tons of section steel, down 6.4% from the same period last year. The revenue per ton of steel was 3279.45 yuan / ton, down 1.35% from the same period last year, and the gross profit margin was 2.51%, down 2.23% from the same period last year.
The volume and price of coke and steel rose in the first quarter: according to the announcement, the company's coke production in the first quarter was 549700 tons, an increase of 10.83% over the same period last year, and sales volume was 534500 tons, an increase of 9.78% over the same period last year. The price of coke was 2146 yuan / ton, an increase of 39.27% over the same period last year. In terms of section steel, the company produced 321200 tons of H-section steel in the first quarter, an increase of 68.52% over the same period last year, and sold 312400 tons of section steel, an increase of 57.22% over the same period last year. The price per ton of steel was 4116 yuan / ton, up 36.68% over the same period last year.
Planning major asset restructuring, related party transactions, related party guarantee problems are expected to be solved: in 2020, accounting firms issued an audit report with qualified opinions for the company, mainly based on the large amount of related party guarantee and the occupation of related party operating funds and other reasons. At present, the company plans to acquire the relevant shares, assets and liabilities of Xintai Iron and Steel and its subsidiaries from the controlling shareholders (including Shanxi Antai holding Group Co., Ltd. And Shanxi Xintai Iron and Steel Co., Ltd.). This will help to solve the related transactions and the corresponding accounts receivable and related guarantee between the company and the related party Xintai Iron and Steel, and form a complete industrial chain.
Investment advice: increase holdings-An investment rating, 6-month target price of 4.12 yuan. We estimate that the return net profit of the company from 2021 to 2023 will be 1.221 billion yuan for 1.103 Placement, and the corresponding EPS will be 1.03 Placement 1.10 for 1.21 yuan per share.
Risk hints: Coke prices have fallen sharply, section steel prices have fallen sharply, and there is uncertainty in major asset restructuring.
