\u3000\u3000 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) (002541)
Event:
Anhui Honglu Steel Construction(Group) Co.Ltd(002541) announced that the company signed the investment agreement for Honglu intelligent assembly base project with the people’s Government of Woyang county. The company will invest in the construction of intelligent assembly base in Woyang County, with a total investment of about 1 billion yuan and a project land area of about 360 mu (240000 square meters).
Comments:
The total capacity of the company’s existing base will be close to 6 million tons. The land area of this project is 360 mu (240000 square meters). It is estimated that the actual built plant area is about 170000 square meters (calculated according to 70% of the land area), and the corresponding annual production capacity of steel structure is about 170000 tons (calculated according to the production capacity of 10000 tons per 10000 square meters of plant area). According to the company’s 2020 annual report, the company has ten major production bases under construction and completed construction, and the production capacity is expected to reach 5 million tons / year by the end of 2022; In addition, according to the investment agreement announced by the company, the company will build another steel structure with an annual capacity of about 900000 tons (Chongqing Nanchuan phase III has an annual capacity of about 450000 tons, Ruyang phase II has an annual capacity of about 230000 tons, Woyang intelligent assembly base has an annual capacity of about 170000 tons, and Jinzhai green prefabricated building materials Industrial Park has an annual capacity of about 50000 tons). The total annual capacity will be close to 6 million tons. The steel structure output of the company in 2021 is about 3.39 million tons, and the output of the company will continue to grow.
The certainty of medium-term output growth has increased, and it is judged that the final capacity of the company is more than 6 million tons. Previously, the company’s capacity guideline in the 2020 annual report was 5 million tons. According to the current announcement data, the company’s total capacity in the future has been close to 6 million tons. The certainty of the company’s medium-term output growth is rising, helping the company maintain growth. On the other hand, the core competitive advantage of the company is cost advantage, which mainly comes from scale effect and fine management ability; In the past two years, the company has continued to sign new base investment agreements. In the future, the capacity scale will further open the gap with other enterprises in the same industry, and the competitive advantage is expected to be strengthened. We are optimistic about the company’s continuously expanded management radius and refined management ability, and judge that the company’s final production capacity will be more than 6 million tons.
Profit forecast, valuation and rating: Anhui Honglu Steel Construction(Group) Co.Ltd(002541) core business is to earn steel structure processing fees, and scale effect and cost control are its core moat. The new base construction plan increases the certainty of the company’s medium-term output growth and helps the company maintain its growth. At the same time, the company’s capacity scale further widens the gap with competitors in the same industry, and the competitive advantage is expected to be strengthened. Maintain the forecast of the company’s net profit attributable to the parent company from 2021 to 2023 of 1.214 billion yuan, 1.508 billion yuan and 1.751 billion yuan. The current price corresponds to the dynamic P / E ratio of about 19x in 2022, maintaining the “buy” rating.
Risk tip: the sharp fluctuation of steel price affects the profitability of the company, the capacity expansion and utilization rate are lower than expected, and the promotion of employee stock ownership plan is lower than expected.
