Events:
In 2021, the production of the subsidiaries of the company is as follows: Qiangang Company: 8.001 million tons of iron, down 0.3% from the same period last year; 8.49 million tons of steel, unchanged from the same period last year; and 8.213 million tons of hot-rolled coil (including internal raw materials), unchanged from the same period last year. Jingtang Company: 13.909 million tons of iron, up 8.1 percent over the same period last year; 15.229 million tons of steel, up 35 percent over the same period last year; and 14.333 million tons of materials, an increase of 41.6 percent over the same period last year. Cold rolling company: 2.028 million tons of cold rolled sheet, an increase of 10% over the same period last year. The company achieved an operating income of 134.034 billion yuan, an increase of 67.65% over the same period last year, a total profit of 9.799 billion yuan, an increase of 252.76% over the same period last year, and a net profit of 7.014 billion yuan for shareholders of listed companies, an increase of 292.64% over the same period last year.
Comments:
The company's product structure is optimized and the proportion of high-end products is improved. The company's three strategic products adhere to the development strategy of continuous leadership of electrical steel, refinement and strength of automotive plates, and high-end breakthroughs in tinplate, and continue to optimize product structure, production line structure and customer structure, so as to improve product quality and efficiency. In 2021, the output of the three strategic products totaled 5.68 million tons, accounting for 26 per cent of the company's steel output and about 40 per cent of profits. The output of the company's eight key products (cold-rolled special steel, hot-rolled pickling plate, weathering steel, energy steel, automobile structural steel, high-strength construction machinery steel, pipeline steel, bridge steel) is 9.47 million tons. The combined output of key and strategic products accounts for 68% of the company's steel output, with a profit contribution of about 85%.
The output of high-end products continues to increase. The output of electrical steel is 1.5 million tons, and the dimensional accuracy and composition control reach the world-class level. The company's high-end electrical steel products account for 48%. In terms of high magnetic induction oriented electrical steel, the output of 0.20mm and below ultra-thin specification high magnetic induction oriented electrical steel reached 54000 tons, an increase of 74% over the same period last year, and its market share reached 60%, ranking first in domestic sales for four consecutive years. The structure of non-oriented electrical steel products continued to be optimized. the output of high-grade non-oriented electrical steel products was 547000 tons, an increase of 28% over the same period last year, of which the output of high-grade non-oriented electrical steel products for new energy vehicles increased by 231% compared with the same period last year. Five of the top 10 car companies in global sales of new energy vehicles have a stable supply.
Investment advice and rating: the company's operating income from 2022 to 2024 is estimated to be 1420.77max 1463.39 / 147.802 billion yuan respectively, and the net profit returned to its mother is 70.84 billion RMB 75.8 billion respectively. With reference to the valuations of Baosteel, Angang and Valin Iron and Steel, the company is given 7 times PE. The reasonable market capitalization of the company in 2022 is 49.469 billion yuan, which is 32.71% more than the current share price, covering the "buy" rating of the company for the first time.
Risk hint: downstream demand is lower than expected, product prices fall; raw material prices rise rapidly