The net profit of 20Q3 returned to its mother was the same as that of the previous month-on-month decline, maintaining the "buy" rating on October 22, 20, the company released three quarterly reports, 20-year M1-9 revenue of 1.77 billion yuan (yoy+2%), net profit of 191 million yuan (yoy-23%); 20Q3 revenue of 610 million yuan (yoy+2%, qoq-14%), net profit of 56 million yuan (yoy-42%, qoq-28%). 20Q3 homing net profit is the same, month-on-month downward, or due to the return of export orders to China, the company's product market share and price are squeezed, but we believe that short-term fluctuations do not change the company's long-term trend for the better. We downgrade our profit forecast and expect EPS to be 0.72, 0.83, 0.89 in 20-22 (the previous value is 0.76, 0.91, and 1.00), maintaining the "buy" rating.
20Q3 seamless pipe scale downlink, welded pipe scale uplink
20Q3, the company achieves seamless pipe production, sales volume of 10122, 87.03 million tons (yoy-24%,-8% 20Q3,-27%), production and sales rate of 86%, average price of 39,000 yuan / ton (yoy-5%, qoq-1%); welded pipe production, sales volume of 9418, 95.88 million tons (yoy+20%, + 36% of yoy+20%, + 4%), production and marketing rate of 102%, average price of 23,000 yuan / ton (yoy-9%, qoq-2%). According to the 20Q3 operating data, the company's product structure has been slightly adjusted, and the seamless pipe scale has declined or is mainly due to the return of industry export orders to China, squeezing out the market share of some companies. According to Wind,20 July-August, the national export volume of stainless steel cold-drawn seamless pipe decreased by 29% compared with the same period last year. 20Q2 decreased by 14% compared with the same period last year; the welded pipe scale upward or due to the good downstream demand such as LNG receiving station, the order is exuberant.
The gross profit margin of 20Q3 sales is much lower than the same period last year.
20Q3, the company's gross sales margin is 17.4% (yoy-9.0pct, qoq-4.8pct), or mainly due to the weakening overseas demand, the industry export orders return to China, driving down the price of seamless pipe, the company's profit margin is squeezed. In terms of expenses, the year-on-year changes in sales, management and R & D expenses are-22%, + 19% and-21%. The financial expenses are regular year-on-year, but the absolute value is small. The expense rate during the period is 7.6%, which is basically the same as that of the same period and month-on-month, and the net profit rate of sales is 9.2% (yoy-7.0pct, qoq-1.8pct).
Ultra-supercritical units, LNG receiving stations, etc. or pull demand performance according to the previous report "Energy steel, growth is expected" (2020.10.13), seamless tubes, 19 years of ultra-supercritical units project, approval ushered in the most exciting part, and ultra-supercritical units have higher power generation efficiency, or the mainstream of thermal power units in the future, good for Super304H and other high-end boiler tubes In terms of welded pipes, the National Pipe Network Company (unlisted) has been in actual operation in July 20, superimposed by the lack of domestic natural gas resources, and the proportion of natural gas in primary energy consumption still has a large growth space, it is expected that the construction of LNG receiving stations will further speed up in the future, which is good for low-temperature welded pipes.
Continue to be optimistic about the company's development and maintain its "buy" rating
20Q3's net profit is the same, month-on-month decline, or due to the return of industry export orders to China, the company's product market share and price are squeezed; but we believe that short-term fluctuations do not change the company's long-term trend for the better. We slightly downgrade our profit forecast and estimate that the EPS for 20-22 will be 0.72, 0.83, 0.89 (the previous value is 0.76, 0.91). DCF estimates that the WACC is 9.29% (the previous value is 9.32%) and the intrinsic value per share is 10.70 yuan; the average PE (2021E) of the comparable company is 11.55 times, and the PE (2021E) of the company is 12.5 times, corresponding to the target price of 10.38 yuan. Comprehensively consider giving the company a target price of 10.70 yuan (the previous value is 11.72 yuan) to maintain the "buy" rating.
Risk hint: the construction progress of the new project is not as expected; the development of the epidemic exceeds expectations.
