Event
The company released the 2020 annual report and the first quarterly report of 2021: the company achieved operating income of 5.786 billion yuan in 2020, an increase of 0.27% over the same period last year, and a net profit of 159 million yuan, an increase of 24.43% over the same period last year. The income in the fourth quarter of 2020 was 1.656 billion yuan, down 2.92% from the same period last year, and the net profit was 12 million yuan, down 78.05% from the same period last year. In the first quarter of 2021, the company achieved an income of 1.516 billion yuan, an increase of 53.83% over the same period last year, and a net profit of 81 million yuan, an increase of 516.54% over the same period last year. The performance is in line with expectations.
Comment
In the first quarter of 2021, product prices rose to hedge against the rise in raw materials, and the company's gross profit margin rebounded. The gross profit margin / sales expense rate / management expense rate / R & D expense rate / financial expense rate in the first quarter of 2021 are 11.18% / 1.03% / 2.52% / 0.55% / 0.21% respectively, which is 12.06pct/ 7.71pct/ 0.60pct/ 0.43pct/-0.32pct compared with the fourth quarter of 2020. From October to November 2020, the price of aluminum, the main raw material for two-piece cans, rose by about 20%, resulting in a 1-2 point increase in the cost per can. At the end of 2020, the industry reached a price increase agreement with some beer enterprises, and the price per can increased by about 3%. To a certain extent, cover the negative impact of the rise in aluminum prices. With the gradual optimization of the competition pattern of the industry and the continuous increase of concentration, we expect that the subsequent price increases will bring greater upward flexibility of profits, and the company's profit margin will increase.
In the first quarter of 2021, the subsidiary completed the consolidated statement, thickening the company's performance. With the completion of the merger of Hebei cans, Foshan cans, Harbin cans and Wuhan packaging in the first quarter of 2021, Baosteel Packaging holds a 97.51% stake in each of the four subsidiaries. In 2020, the revenue of Hebei cans, Foshan cans, Harbin cans and Wuhan packaging increased by 57.88% /-10.39% /-3.47% /-13.49% respectively compared with the same period last year, and the net profit increased by 601.43% / 243.20% / 71.78% / 16.36% respectively. With the improvement of the profitability of subsidiaries, the company's performance has been thickened.
Investment suggestion: we expect the EPS of the company to be 0.28 / 0.33 / 0.38 yuan respectively in 2021-2023, and the current stock price corresponds to 31.0 / 26.3-fold / 22.8 times of PE in 2021-2023. It is recommended to buy.
Risk tips: raw material costs fluctuate, price increases fall short of expectations, performance forecasts and valuations fall short of expectations