\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 98 Angang Steel Company Limited(000898) )
Event overview: on March 30, the company released its 2021 annual report: in 2021, the company achieved a revenue of 136674 billion yuan, a year-on-year increase of 35.45%; The net profit attributable to the parent company was 6.925 billion yuan, a year-on-year increase of 250.10%; Net profit deducted from non parent company was 6.941 billion yuan, with a year-on-year increase of 251.44%. Quarterly, in 2021q4, the company achieved a revenue of 28.137 billion yuan, a year-on-year decrease of 5.36%; The net profit attributable to the parent company was -564 million yuan, a year-on-year decrease of 186.37%; Net profit deducted from non parent company was – 624 million yuan, a year-on-year decrease of 191.23%.
Comments: steel production increased slightly and gross profit margin increased
① volume: in 2021, the steel output increased by 0.94% year-on-year, and the sales volume decreased by 0.85% year-on-year. The company produced 25.35 million tons of iron in 2021, a year-on-year decrease of 2.01%; 26.47 million tons of steel, a year-on-year decrease of 0.04%; 24.8 million tons of steel, an increase of 0.94% over the previous year; 24.4 million tons of steel were sold, a decrease of 0.85% over the previous year, and the steel production and sales rate was 98.39%.
② price: the company implemented cost reform and increased gross profit margin. 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 the implementation of cost reform, the company estimated that the actual cost per ton of steel increased by only 36.20%, and the actual selling price of products increased by about 36.69%, resulting in the overall gross profit margin of the company rising to 9.69% in 2021.
Future core focus: equity incentive and high dividend show the company’s confidence
① equity incentive plan helps the company’s long-term development. The company repurchases shares from the secondary market for equity incentive. In terms of performance evaluation conditions, the company makes requirements for the cash return on total assets, profit and labor productivity of the main iron and steel industry, which will promote the company to make progress with the core backbone, improve the company’s operation and management ability and production efficiency, help the company in the long run and demonstrate the company’s confidence in future development.
② high dividend yield returns to shareholders. The company’s 2021 profit distribution plan takes the total number of 9402611828 shares with distribution rights as the base, and distributes a cash dividend of RMB 2.21 (including tax) to all shareholders of the company for every 10 shares, with a total cash dividend of RMB 2.078 billion, accounting for 30.01% of the net profit attributable to shareholders of listed companies and a stock interest rate of 5.89%.
③ outstanding advantages in strategic resource guarantee. In 2021, the Proctor price index of iron ore rose by 49.06%, while the mining company of Anshan Iron and Steel Group mastered 8.8 billion tons of iron ore resources; It has a mining and stripping capacity of 280 million tons / year, beneficiation capacity of 65 million tons / year and iron concentrate production capacity of 22 million tons, ranking first in China. In addition, Angang Group has a kalala iron ore base with an annual output of 8 million tons in Australia, which provides a strong resource guarantee for the production and operation of the company.
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 7936 / 8571 / 9575 million in turn, and the PE corresponding to the closing price on March 31 will be 4x, 4x and 3x. It will be covered for the first time and given a “recommended” rating.
Risk tip: the price of raw materials is rising, the downstream demand is lower than expected, and the covid-19 epidemic continues to affect.
