\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 507 Fangda Special Steel Technology Co.Ltd(600507) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 21.679 billion yuan, a year-on-year increase of 30.59%, a record high; The net profit attributable to the parent company was 2.732 billion yuan, a year-on-year increase of 27.6%; The net profit attributable to the parent company after deduction was 2.653 billion yuan, a year-on-year increase of 29.15%.
The total output of steel and leaf spring decreased slightly year-on-year, and the sharp rise in gross profit of building materials led to the second highest performance in history: under the background of flat control of crude steel output in 2021, the output of steel and leaf spring products of the company was 4.4182 million tons (year-on-year – 0.5%), including 4.2479 million tons of steel (year-on-year + 0.01%) and 170300 tons of leaf spring (year-on-year – 11.76%); In the product structure, the output of building materials accounted for 82.15%, the average price of building materials was 4498 yuan / ton (year-on-year + 34.07%), the average price of leaf spring was 8597 yuan / ton (year-on-year + 17%), the average price of spring flat steel was 2809 yuan / ton (year-on-year + 21%), and the annual operating revenue was 21.679 billion yuan, a record high; The gross profit of building materials per ton of steel is 755 yuan / ton (year-on-year + 23.09%), the gross profit of leaf spring is 960 yuan / ton (year-on-year – 4%), and the gross profit of spring flat steel is 1221 yuan / ton (year-on-year flat). The annual net profit attributable to the parent company is 2.732 billion yuan, the second highest level in history.
It is estimated that the output of steel and leaf spring of the company will decrease by 4% year-on-year in 2022. In 2022, the business target is to produce and sell 4.05 million tons of steel products (- 4.6% year-on-year compared with the output in 2021), 188000 tons of leaf springs (- 10.4% year-on-year compared with the output in 2021), and a total of 4.238 million tons of steel products and leaf springs (- 4.0% year-on-year compared with the output in 2021).
The dividend ratio and dividend rate of the company rank among the top listed steel enterprises, and the corresponding dividend rate will reach 12.91% in 2021. In 2020, the proportion of cash dividends of the company reached 110.8%, ranking first among listed steel enterprises; In 2021, the cash dividend ratio was as high as 87.6%, corresponding to the share price on March 18, the dividend rate was as high as 12.91%.
The exercise conditions of the draft equity incentive plan correspond to the performance of RMB 2.0 billion, RMB 2.08 billion and RMB 2.163 billion from 2022 to 2024. The company plans to grant 216 million restricted shares to 1230 people, including directors, senior managers, core (management, marketing, technical) personnel and key employees, accounting for about 10% of the total share capital, with a grant price of 4.29 yuan / share. The corresponding exercise conditions of equity incentive are as follows: (1) the weighted average return on net assets from 2022 to 2023 shall not be less than 20%, and shall not be lower than the level of 70 percentile weighted average return on net assets of benchmark companies in the same industry in the same period; (2) If the reserved part is granted in 2023, the corresponding performance assessment objective is: the weighted average return on net assets from 2023 to 2024 is not less than 20%, and not less than the 70 percentile weighted average return on net assets of the benchmarking companies in the same industry in the same period. Assuming that the growth rate of the company’s net assets from 2022 to 2024 is the same as the year-on-year growth rate in 2021 (4%), the corresponding net profit attributable to the parent company is RMB 2.00 billion, RMB 2.080 billion and RMB 2.163 billion respectively, and the corresponding share price PE on March 18 is 9.3, 8.9 and 8.6.
Profit forecast, valuation and rating: the company adheres to the strategy of “combination of PU and Te”, continuously improves the profitability of products, maintains the forecast of the company’s net profit attributable to the parent in 20222023 of RMB 2.850 and 2.907 billion, corresponding to EPS of RMB 132 and 1.35 respectively, and the forecast of the new company’s net profit attributable to the parent in 2024 of RMB 2.955 billion and EPS of RMB 1.37, maintaining the rating of “overweight”.
Risk tip: the demand for steel has fallen sharply; The price of raw materials rose sharply.
