\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 808 Maanshan Iron & Steel Company Limited(600808) )
The company is the largest industrial enterprise in Anhui Province, with a record steel output in 2021 Maanshan Iron & Steel Company Limited(600808) is the largest industrial enterprise in Anhui Province and one of the super large iron and steel complex enterprises in China. In 2021, the company’s steel output reached 20.45 million tons, a record high. Among them, the proportion of long wood sector products is balanced. It is estimated that the sector output accounts for 47% and the long wood output accounts for 52%.
Special steel products focus on the needs of track, automobile, energy and high-end manufacturing, and the product structure will continue to be optimized. Maanshan Iron and Steel Co., Ltd. has firmly ranked the first brand in China for special steel for rail transit, entered the first echelon in China for special steel for energy, and has achieved full variety and series coverage for special steel for automobile. The company’s heavy-duty H-section steel products are gradually replaced by imports. The wheel products in the axle steel products (we expect the output to account for 1% in 2021 and the gross profit to account for 5%) account for about 28.6% of the Chinese market (2020); Silicon steel products have the ability of full coverage of low, medium and high brands. In 2020, the market share of China’s output is about 4.3%, and the proportion of medium and high brand products is close to 50%. In November 2021, the construction of the company’s 3.2 million T / a new special steel project was officially started, and the product structure was further optimized. The company expects that the market share of superior special steel products in China will reach more than 12% in 2025.
It is suggested to pay attention to the target of high elasticity. In the short and medium term, China’s measures to improve the supply-demand relationship of iron ore also depend on reducing steel production. The price of iron ore reached a historical high of US $224 / ton in July 2021. With the reduction of China’s crude steel in the second half of 2021, the price fell to us $85.8/ton. After the reduction expectation weakened, the price returned to a historical high of US $152 / ton in February 2022. Since February 11, the national development and Reform Commission has successively interviewed iron ore traders and some port enterprises. At present, the reduction of industry output is expected to increase again, and the targets with high market value elasticity are expected to benefit.
Under the guarantee of high elasticity, high dividend and high performance, the medium-term investment value of the company appears. Since 2015, the company’s cost per ton of steel and three expenses (sales, management and Finance) have shown a downward trend except for raw materials. In December 2021, the company issued a draft equity incentive plan, and the performance exercise conditions correspond to that the company’s net profit deducted from non parent company from 2022 to 2024 will be at least 4.10/46.3/5.28 billion yuan. We believe that the company’s performance will be higher than this conservative estimate; Moreover, the elasticity of the company’s performance to the rise of steel price ranks in the forefront of listed steel enterprises, and the profit is greatly affected by the rise of steel price; In addition, the average dividend ratio (50.6%) of the company from 2018 to 2020 is second only to Fangda Special Steel Technology Co.Ltd(600507) , Baoshan Iron & Steel Co.Ltd(600019) . Assuming that the company continues the dividend ratio, the current share price corresponds to the dividend ratio of A-Shares in 2021, which is 9.52%, and the medium-term investment value is prominent.
Profit forecast, valuation and rating: at present, the expectation of production restriction in the iron and steel industry is enhanced, the company has the characteristics of high elasticity, high dividend and high performance guarantee, and the product structure is continuously optimized, and the profitability and performance are expected to be further improved. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 5.332 billion yuan, 5.056 billion yuan and 5.202 billion yuan respectively, corresponding to 5.8, 6.1 and 5.9 times of the current A-share PE and 3.5, 3.7 and 3.6 times of the current Hong Kong share PE. In combination with the company’s relative valuation level, the company’s a / H shares were rated as “overweight” for the first time.
Risk warning: the limited production of crude steel is less than expected; Decline in terminal demand; The rise in steel prices raises the risk of government regulation.
