\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 808 Maanshan Iron & Steel Company Limited(600808) )
Event: in 2021, the company realized an operating revenue of 113851 billion yuan, with a year-on-year increase of 39.5%, and the net profit attributable to the parent company was 5.332 billion yuan, with a year-on-year increase of 168.95%. After deduction, the net profit attributable to the parent company was 5.413 billion yuan, with a year-on-year increase of 264.37%. In the fourth quarter, the operating revenue was 28.036 billion yuan, a month on month decrease of 3.16% and a year-on-year increase of 19.79%; The net profit attributable to the parent company was -1.195 billion yuan, and the net profit attributable to the parent company after deducting non-profit was -1.275 billion yuan, which turned into a loss on a month on month basis.
In 2021, the prices and gross profit of long-term materials and sectors rose sharply, and the net profit attributable to the parent company of the company hit the second highest in history: in 2021, the average price of long-term materials was 4580 yuan / ton (year-on-year + 39.0%), the average price of sectors was 5156 yuan / ton (year-on-year + 33.5%), and the average price of axle steel was 10250 yuan / ton (year-on-year + 3.1%). The increase in the prices of long-term materials and sectors pushed the revenue to a record high; The average gross profit of long products was 398 yuan / ton (year-on-year + 60%), that of sectors was 855 yuan / ton (year-on-year + 141%), and that of axle steel was 1598 yuan / ton (year-on-year + 0.2%). The increase in the gross profit of long products and sectors pushed the company’s net profit to the next highest level after 2018 (5.943 billion yuan).
In 2022, the company’s steel production target increased slightly by 2.2%; in 2022, the company’s crude steel and steel business target was to produce 20.97 million tons and 20.9 million tons, which was flat and increased by 2.2% year-on-year compared with the actual production in 2021.
The three expense rates of the company reached the lowest since 2011, and the R & D expense rate reached a new high since 2011: in 2021, the company’s sales, management and financial expense rate further fell to 2.0%, the lowest since 2011, and the three expense per ton of steel products was 100 yuan / ton, a year-on-year decrease of 29.52%; In order to improve the overall R & D capability and competitiveness in the high-end product market, the R & D expense rate of the company in 2021 was 4.0%, a new high since 2011. The R & D expense accounted for 30.2% of the company’s gross profit, and the R & D expense per ton of steel was 195 yuan / ton, a year-on-year increase of 132.6%.
In 2021, the dividend ratio of the company was 50.6%, and the dividend ratio of A-Shares reached 8.81%. The average dividend ratio of the company from 2018 to 2020 (50.6%) was second only to Fangda Special Steel Technology Co.Ltd(600507) , Baoshan Iron & Steel Co.Ltd(600019) , the dividend ratio of the company in 2021 was flat at 50.5% year-on-year, and the current dividend ratio of a share price corresponding to 2021 was 8.81%.
The exercise conditions of the draft equity incentive plan of the company correspond to the performance of RMB 41.0/46.3/5.28 billion from 2022 to 2024: in December 2021, the company issued the draft equity incentive plan, and the performance exercise conditions are: (1) based on the performance unlocking conditions, “based on 2020, the cash return on net assets shall not be less than 22% / 24% / 28%”; (2) Based on the performance unlocking condition, “the compound growth rate of total profits (excluding non recurring profits and losses) from 2022 to 2024 (compared with 2020) shall not be less than 7% / 7% / 10%”. According to our calculation, the net profit deducted by the company from non parent company from 2022 to 2024 is at least 41.0/46.3/5.28 billion yuan, corresponding to 7.5, 6.6 and 5.8 times of A-share PE on March 23.
Profit forecast, valuation and rating: the company has the characteristics of high dividend, high performance guarantee and gradual optimization of product structure. We maintain the forecast of net profit attributable to parent company of RMB 5.056 billion and RMB 5.202 billion from 2022 to 2023, with corresponding EPS of RMB 0.66 and RMB 0.68 respectively. The forecast of net profit attributable to parent company of new company in 2024 is RMB 5.365 billion, with corresponding EPS of RMB 0.70, and maintain the “overweight” rating of a / H shares.
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.
