Main points of investment:
H1 rapid growth in operation, active layout of steel cord market
1) 2021H1 achieved revenue of 2.06 billion yuan, an increase of 67.05% over the same period last year, of which Q2 revenue was 911 million yuan, an increase of 28.16% over the same period last year, setting a new record for Q2 in a single quarter. Gross profit margin: H1 is 11.68%, year-on-year increase of 1.99pct Q2 is 13.70%, and 1.35/3.63pct is higher than the same month. H1 company sold 277000 tons of all kinds of steel wire, an increase of 41.03% over the same period last year, and the revenue end was faster than the sales end, indicating that the product structure improved and helped the company to increase its gross profit margin. 2) 2021H1 achieved a net profit of 127 million yuan, an increase of 221.63% over the same period last year, of which Q2 was 74 million yuan, an increase of 58.88% and 40.79% compared with the previous month. Net interest rate: H1 is 6.15%, 2.96pct is higher than the same period last year, of which Q2 is 8.13%, 1.57/3.55pct is higher than the same month.
During the period of H1/Q2, the expense rate decreased 2.56/1.12pct compared with the same period last year. 3) at the end of phase H1, the company is under construction of 139 million yuan, an increase of 71.67% compared with the end of the year, mainly due to the investment in the construction of steel cord equipment and the increase in equipment investment.
The company's steel cord products and overseas markets are expected to become medium-and long-term growth points. 1) the traditional bead steel wire business is expected to maintain steady and rapid growth, with a steady and small increase in market share. The company actively distributes steel cord products and markets through self-built production lines and the acquisition of Shengtong steel cord assets, and is expected to achieve rapid growth with the help of the original bead steel wire customer channels and Shengtong customer channels in the future. 2) the growth of overseas revenue is higher than that of China as a whole, and the proportion of overseas revenue continues to increase from 7.08% in 2015 to 14.56% in 2020. In the future, as the company increases the market development of international and domestic tire enterprises' overseas business, and relies on the cost-effective advantage to increase the overseas market share, the company's overseas revenue is expected to still achieve rapid growth. 3) in the medium and long term, with the production of high-performance projects, the improvement of product structure and the appearance of scale effect, the gross profit margin of steel cord and bead wire is expected to hit bottom and pick up. At the same time, as the export of high value-added products continues to grow, the export gross margin is expected to continue to rise in the future.
Profit forecast, maintain "overweight" rating
We estimate that the company's EPS in 2021-23 will be 0.61 euro 1.00 shock 1.39 yuan per share, corresponding to the PE of 15-9-7, respectively. Domestic bead wire faucet and steel cord business are expected to become a new growth point of the company and maintain "increase".
Rating.
Risk hints: automobile and tire industry downturn exceeded expectations; the impact of the global epidemic exceeded expectations; the company's market development was lower than expected; Shengtong steel cord asset merger and acquisition integration was lower than expected; raw material price rise risk; exchange rate fluctuation risk