This report is read as follows:
The demand caused by the high raw material price superimposed by the epidemic was delayed, and the company's first-half performance was lower than expected. Under the background of the development of infrastructure and the decline of raw material costs in the second half of the year, the company's product profit is expected to rise, and the company's performance will gradually rise.
Main points of investment:
Maintain the "overweight" rating. In the first half of the year, the company's gross profit per ton of epidemic situation and raw material price compression was lowered, and the company's eps forecast for 2022-2024 was 0.490.52 prime 0.56 yuan (the original 0.79 prime 0.84 plus 0.92 yuan), and the corresponding return net profit was 6.99 pound 7.41 million yuan 807 million. Taking into account the decline in the valuation level of the industry, refer to similar companies, give the company a valuation of 15 times PE in 2022, lower the company's target price to 7.35 yuan (formerly 11.67 yuan), and maintain the "overweight" rating.
The drag on performance from demand is gradually easing. Affected by the epidemic in the first half of 2022, the downstream demand of the company was weak, the steel price at the superimposed cost side was stronger, the company's profitability declined, and the performance in the first half was lower than expected. In the second half of the year, the domestic epidemic situation gradually alleviated, the demand for steel pipe in real estate, infrastructure and other industries gradually recovered, and the demand downstream of the company obviously warmed up. Superimposed raw material end steel prices fall, the company's unit product profitability gradually increased, it is expected that the company's single-quarter profit will gradually rise.
The national layout strategy is advancing steadily, and sales continue to rise. The company continues to promote the construction of Jiangsu Youfa and Tangshan Youfa. Jiangsu Youfa Phase 1 and Phase 2 have been put into production. Tangshan Youfa plate buckle scaffolding project has achieved a break-even in April 22, and the square management project has been put into production in February 22. In the first half of 22, the company sold 6.4087 million tons of steel pipes, an increase of 18.68% over the same period last year. We expect that the company's production capacity will continue to increase with the landing of the company's initial public offering and convertible bond projects.
Pipeline requirements may be compensated. In the current economic environment, infrastructure investment is more important for stabilizing the economy, while the demand for steel pipe in the fields of water conservancy and municipal administration is relatively stable. We expect that due to the delayed infrastructure demand of the epidemic, the demand for steel pipe may be compensated.
Risk hint: the epidemic situation repeatedly exceeded expectations, and the dealer managed the risk.