With the opening of the annual report season of the A-share market, the transcripts of iron and steel enterprises in 2021 have also surfaced one after another.
According to the data of China stock market news choice financial terminal, as of March 25, 12 of the 25 listed companies in the general steel sector of the A-share market (classified by Dongcai industry) have disclosed the annual report or performance express of 2021.
From the perspective of profitability, among the above 12 listed companies, 11 have a year-on-year increase in net profit attributable to the parent company, of which 4 have a year-on-year increase of more than 100%, namely Bengang Steel Plates Co.Ltd(000761) (550.77%) Beijing Shougang Co.Ltd(000959) (293.19%), Shanxi Taigang Stainless Steel Co.Ltd(000825) (263.63%) and Maanshan Iron & Steel Company Limited(600808) (168.95%); During the reporting period, 12 companies achieved year-on-year growth in total operating revenue, and four steel enterprises, namely Beijing Shougang Co.Ltd(000959) , Bengang Steel Plates Co.Ltd(000761) , Hang Zhou Iron & Steel Co.Ltd(600126) and Shanxi Taigang Stainless Steel Co.Ltd(000825) increased by more than 50%.
Maanshan Iron & Steel Company Limited(600808) disclosed in the annual report that the company's total operating income and net profit attributable to the parent company increased year-on-year during the reporting period, which was caused by the year-on-year increase of steel price and the increase of product gross profit margin.
In fact, not only Maanshan Iron & Steel Company Limited(600808) , but also Shandong Iron And Steel Company Ltd(600022) , Shanxi Taigang Stainless Steel Co.Ltd(000825) and Nanjing Iron & Steel Co.Ltd(600282) and other steel enterprises, when disclosing the reasons for performance growth, all said that it was related to the rise of steel prices.
According to the data of business agency, the reference price of China's steel products has always been at a high level in 2021.
Take rebar as an example. On January 1, 2021, the reference price of rebar was 4429 yuan / ton, which continued to rise after a slight reduction. It reached the stage peak of 5748 yuan / ton on May 10, and then maintained a high shock trend. On October 11, it refreshed the previous high point to 595333 yuan / ton. After a period of correction, it closed at 467778 yuan / ton on December 31. By lengthening the time line, it can be seen that the reference price of rebar reached the lowest in history of 1654 yuan / ton on December 17, 2015, while it fluctuated around the range of 3400 yuan / ton - 4400 yuan / ton from 2019 to 2020.
Ye Yindan, a researcher of Bank Of China Limited(601988) Research Institute, said in an interview with Securities Daily that the rise in steel prices since last year was mainly due to the sharp rise in the prices of raw fuels such as iron ore and coking coal, which pushed up the cost of steel.
According to Ye Yindan, the reason why steel enterprises can pass on the pressure of rising costs to downstream enterprises through product price increases is that the demand for steel in real estate and infrastructure construction is basically stable, coupled with the strong performance of manufacturing investment, especially in automobile manufacturing and other industries, which plays a greater role in driving the demand for steel.
In terms of stock price, as of the closing on March 25, the A-share market ordinary steel sector index (803071. EI) closed at 165387 points, with a cumulative decline of 6.38% in 2022. It has fallen 37.31% from the historical second high of 2736.8 points set on September 13, 2021.
For the investment value of this sector, Yang Ruyi, partner of Chunshi group, said in an interview with the reporter of Securities Daily that it will continue to be optimistic in the medium term.
According to Yang Ruyi, in 2021, relevant departments issued a series of policies and measures to promote the high-quality development of the iron and steel industry, mainly including project filing, capacity replacement, cancellation of tax rebates, energy efficiency constraints, "double carbon" objectives and de capacity inspection. The policy and measure system of the iron and steel industry is more perfect. Overall, the supply side reform of the industry is still advancing, the demand side is expected to improve under the promotion of this year's steady growth policy, and the situation of short supply may continue.
"Against the backdrop of a historically high profit and a historically low valuation, the target probability of 'carbon neutralization' will bring the supply ceiling of the industry. In addition, the raw material side will contribute cost dividends again, and the steel stocks will usher in a wave of sector opportunities for double rise in performance and valuation. They are optimistic about undervalued sectors and some high-quality long material enterprises." Yang Ruyi said.
