\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 282 Nanjing Iron & Steel Co.Ltd(600282) )
Event overview: on March 22, the company released its 2021 annual report: in 2021, the company achieved a revenue of 75.674 billion yuan, a year-on-year increase of 42.45%; The net profit attributable to the parent company was 4.091 billion yuan, a year-on-year increase of 43.75%; Net profit deducted from non parent company was 3.690 billion yuan, with a year-on-year increase of 49.84%. Quarter by quarter, in 2021q4, the company achieved a revenue of 16.519 billion yuan, a year-on-year increase of 14.21%; The net profit attributable to the parent company was 622 million yuan, a year-on-year decrease of 25.86%; Deduct the net profit not attributable to the parent company of 459 million yuan, a year-on-year decrease of 23.46%.
Comments: in 2021, the production and sales of steel increased, and the gross profit margin increased by 0.77pct
① volume: in 2021, the output of steel products increased by 3.87% year-on-year, and the sales of advanced steel materials continued to increase. In 2021, the output of steel products of the company was 10.6 million tons, with a year-on-year increase of 3.87%, and the sales volume was 104037 million tons, with a year-on-year increase of 2.11%. Among them, the sales volume of special sectors is 5.3383 million tons, the sales volume of special steel long materials is 3.0111 million tons, and the sales volume of construction threads is 2.0543 million tons; The sales volume of advanced steel materials was 1.8111 million tons, with a year-on-year increase of 16.15%, accounting for 17.41% of the total sales volume.
② price: the company significantly reduced the cost and increased the efficiency, and the gross profit margin increased by 0.77pct. In 2021, the price of main raw materials iron ore was + 49.06%, the price of main coking coal was + 80.75%, the price of coke was + 50.08%, and the price of scrap steel was + 29.69%. However, through cost reduction and efficiency increase, the company estimated that the actual cost per ton of steel increased by only 42%, and the actual selling price of products increased by about 44.72%, resulting in an increase in the company’s overall gross profit margin of 0.77pct to 11.68% in 2021.
Future core focus
① optimize and upgrade the product structure and steadily improve the competitiveness. In 2021, the sales volume of products in the field of new energy and oil and gas equipment accounted for 16.5%; The sales volume of products in the field of shipbuilding and marine engineering accounted for 11.1%. At the same time, the sales conversion rate of new R & D products reached 82%; The demand of advanced steel market is strong, and the profit contribution continues to increase.
② deepen the industrial chain layout and set foot in the fields of coke, fine chemicals and digitization. Coke is distributed in Indonesia around the upstream of the industrial chain. Jinrui new energy and Jinxiang new energy are jointly established to build coke projects with an annual output of 2.6 million tons and 3.9 million tons respectively. In addition, Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) focuses on new materials, industrial Internet and other tracks.
③ equity incentive helps the long-term development of the company. The company implemented the equity incentive plan for three consecutive years from 2017 to 2019. The number of incentive objects has increased year by year, mainly middle-level managers and core technical (business) backbone, so as to fully mobilize the enthusiasm of the core team and lay a solid foundation for the long-term development of the company.
④ high dividend returns to shareholders, and the increase of shareholders’ holdings shows their confidence in development. In 2021, the company distributed a cash dividend of 3.00 yuan (including tax) for every 10 shares to all shareholders, with a cash dividend ratio of 45.07%. Shareholders maintain confidence in the development of the company. Nanjing Steel Union has increased its holdings of 25338462 shares since November 19, 2021.
Profit forecast and investment suggestions: the company strives to promote the continuous optimization of variety structure; Deepen the industrial chain layout, and the performance is expected to maintain stable growth. We expect that the net profit attributable to the parent company from 2022 to 2024 will be RMB 4882 / 5796 / 6640 million in turn, and the PE corresponding to the closing price on March 23 will be 5x, 4x and 3x. It will be covered for the first time and given the rating of “prudent recommendation”.
Risk tip: the price of raw materials fluctuates sharply, the downstream demand is less than expected, and the covid-19 epidemic continues to affect.
