In 2022, the supply and demand of the iron and steel industry was basically stable: the output continued to be controlled horizontally, the demand still increased by 1-3% year-on-year, and the tight supply and demand situation remained.
In 2022, there is a large expectation gap in steel demand: the market is generally bearish on real estate, but we believe that the demand of most steel industries except real estate will increase. We expect that the steel consumption in the downstream (container, shipbuilding, energy pipeline, chemical industry, special machinery, general machinery, mechanical parts, etc.) accounting for 1 / 3 of the later cycle will increase more significantly, accounting for about 2% of the infrastructure demand accounting for nearly 1 / 4, These areas will effectively hedge the decline in real estate demand.
In the next 22 years, the global iron ore supply is expected to increase by 100-150 million tons, mainly concentrated in overseas enterprises and domestic mines other than the three major mines. The proportion of steel in the profits of the industrial chain is further increased. We expect the average ore price to decline by 15.9% in 2022.
We expect that in 2022, the average steel price will decrease by 278 yuan / ton, the cost will decrease by 343 yuan / ton, and the gross profit of the industry will be flat or slightly increased. The performance of some enterprises with increased output or structural benefits still increased by 0-20% year-on-year.
With the general improvement of the cash flow statement of listed companies, the increase of industry concentration and the sharp decline of capital expenditure, the proportion of corporate dividends has increased year by year, gradually entering the high dividend range of 30-60%, and the annual dividend rate in 21 is generally expected to reach 5-10%, which is more attractive.
Investment strategy: 1) replenish inventory in spring. The superposition of low inventory and low production for two quarters, the normal light and peak seasons on the demand side, and a wave of rise in steel prices and average prices of steel stocks. 2) Steady growth in the second half of the year, realizing growth, and paying attention to the demand elasticity of steel stocks.
Investment target of Pugang: comprehensively considering dividend, flexibility, valuation, performance certainty and other factors, it is recommended to recommend Baoshan Iron & Steel Co.Ltd(600019) , and it is recommended to pay attention to: Fangda Special Steel Technology Co.Ltd(600507) , Sansteel Minguang Co.Ltd.Fujian(002110) , etc.
Non conventional steel opportunities in the iron and steel industry chain are becoming more and more important. In the past 22 years, we have been relatively optimistic about wind power steel, nuclear power steel, pipelines, etc. we recommend Zhangjiagang Guangda Special Material Co.Ltd(688186) , Citic Pacific Special Steel Group Co.Ltd(000708) , Zhejiang Jiuli Hi-Tech Metals Co.Ltd(002318) , and pay attention to Zhejiang Kingland Pipeline And Technologies Co.Ltd(002443) , Xinxing Ductile Iron Pipes Co.Ltd(000778) .
Risk tip: tight liquidity, declining real estate demand and fluctuations in raw material prices.
