\u3000\u3000 Hunan Valin Steel Co.Ltd(000932) (000932)
Events
On the evening of January 27, the company released the performance forecast for 2021. In 2021, it is expected to realize the net profit attributable to the parent company of 9.5-9.9 billion yuan, with a year-on-year increase of 49% – 55%; The net profit deducted from non parent company was 9.4-9.8 billion yuan, with a year-on-year increase of 47% – 54%; EPS is 1.39-1.57 yuan.
Commentary
Q4 performance meets expectations. In 21 years, the net profit attributable to the parent company from Q1 to Q3 was 7.764 billion yuan, and the net profit attributable to the parent company from Q4 was 1.736 billion yuan to 2.136 billion yuan, with a year-on-year increase of 11% – 37%. In terms of sectors, the demand for shipbuilding, wind power, automobiles and household appliances is good, while the demand for construction machinery and heavy trucks is weak; In terms of long timber, affected by the real estate regulation policy, the demand is weak, and the demand for high-rise bridges remains stable; The demand for seamless steel pipe is relatively stable in the downstream oil and gas industry. The company’s core subsidiaries Valin Xianggang, Valin LIANGANG and automobile sector company achieved record profits in the whole year.
The production capacity of automobile sector continues to expand, benefiting from the general trend of lightweight. In the past two years, benefiting from the development trend of automobile lightweight and the rapid development of new energy vehicles, the company has a good demand for automobile panels. At present, the company is accelerating the construction of phase II project of automobile sector, with a total investment of 1.07 billion yuan. After being put into operation, the production capacity of acid rolling line will be increased from 1.5 million tons to 2 million tons per year, the production capacity of galvanizing line and continuous return line will be increased from 1.15 million tons to 1.6 million tons, and the new production capacity will be 450000 tons. The product is positioned as high-end automobile sector. It is expected to be put into operation in the fourth quarter of 22, The third generation of cold formed ultra-high strength steel and zinc magnesium alloy coating products will be introduced.
Upgrading of production line structure and transformation of high-end manufacturing. In terms of hot-rolled sector, the phase II project of high-strength steel of Hualing Lianyuan Steel has added 100000 tons of annual heat treatment capacity; In terms of cold-rolled sheet, Hualing Lianyuan Steel’s high-end household appliance galvanizing line project has added an annual galvanizing capacity of 400000 tons; In terms of seamless steel pipe, the R & D and industrial transformation project of high-end engineering machinery pipe of 720 unit has been successfully promoted. It is expected to be put into operation in the first half of 22 years, increasing the production capacity of more than 150000 tons. In terms of wire and bar, the second line quality improvement project of Valin Xianggang bar is expected to be put into operation in early 22, which can improve the quality of large-scale products and increase 40000 tons of high-grade steel bars per year.
Profit forecast & investment suggestions
According to the 21-year performance forecast, the net profit attributable to the parent company from 21 to 23 years was raised by 3%, 6% and 8% to 9.689 billion yuan, 10.065 billion yuan and 10.268 billion yuan respectively, with corresponding EPS of 1.40 yuan, 1.46 yuan and 1.49 yuan respectively, and corresponding PE of 4 times, 4 times and 3 times respectively, maintaining the “overweight” rating.
Risk tips
The release of steel replacement capacity exceeded expectations again; Downstream demand was lower than expected.
