\u3000\u3 China Vanke Co.Ltd(000002) 645 Jiangsu Huahong Technology Co.Ltd(002645) )
Event:
The company released the performance express of 2021, and achieved an operating revenue of 6.775 billion yuan in the whole year, with a year-on-year increase of 100.71%; The net profit attributable to shareholders was 532 million yuan (excluding 498 million yuan), with a year-on-year increase of 130.00% (excluding 136.4%). Roe (weighted) 16.52%, a significant increase of 7.98 percentage points. At the same time, the company released the performance forecast of 2022q1, with an estimated net profit of 230 ~ 270 million yuan, a year-on-year increase of 70.68% ~ 100.36%; Deduct non net profit of RMB 220260 million, with a year-on-year increase of 76.48% ~ 108.57%.
The simultaneous rise of volume and price is the main reason for the continued high growth of performance, and the continuous high volume and high certainty of production capacity
The company's performance in 2022q1 increased significantly by about 100 million yuan month on month compared with that in 2021q4, and the simultaneous rise of product volume and price is the main reason: the demand for rare earth permanent magnet materials in low-carbon fields such as new energy vehicles, wind power and energy-saving motors continues to increase, the prosperity of rare earth industry is high, and the price of praseodymium and neodymium oxide continues to rise, with the price as high as 1.105 million yuan / ton in 2022q1; Jiangxi Wanhong rare earth recovery capacity acquired by the company in the middle of 2021 has also gradually increased, promoting the company's rare earth recovery business to achieve substantial growth. At the same time, the business units of the company's scrap processing sector benefited from carbon emission reduction and other factors in the iron and steel industry, and the scale and profitability also continued to improve.
In the context of global carbon reduction, recycling of renewable resources has become an emerging strategic industry. As a subdivision leader in the two renewable resources fields of scrap steel and rare earth, the company has great potential for continuous business expansion. In the field of rare earth recycling, the 60000 ton waste recycling project cooperated by the company and southern rare earth is about to be put into operation, which will effectively ensure the continuous expansion of the company's capacity in the comprehensive utilization of rare earth resources.
In the context of double carbon, the demand for rare earths is improving, and the demand for new energy vehicles and industrial motors has increased significantly
China's rare earth mining and smelting capacity occupies a leading position in the world, and the global short-term supply increment mainly comes from the growth of China's total amount control indicators. In 2022, the total control indicators of the first batch of rare earth mining, smelting and separation were 100800 tons respectively, with a year-on-year increase of 20%. On the demand side, rare earth materials have a good prospect under the background of carbon neutralization. High performance rare earth permanent magnet materials are the core materials in the fields of new energy, energy conservation and environmental protection: we calculate that new energy vehicles are the downstream with the largest demand increment of rare earth permanent magnet materials, and the demand for praseodymium and neodymium is expected to reach 246 ~ 41000 tons in 2025; The demand of rare earth permanent magnet industrial motor corresponding to praseodymium and neodymium in 2025 is expected to reach 15000 tons; The demand for praseodymium and neodymium of wind power permanent magnet motor is expected to double to about 12000 tons in 2025.
The significant growth of carbon reduction in electric furnace steelmaking is determined, and the scrap industry chain is expected to maintain a high boom
The steel industry accounts for 15% of China's carbon emissions and is the manufacturing industry with the largest proportion. The carbon emission intensity per ton of steel in long process is about 1.46 tons of CO2 / ton of steel, while that in short process electric furnace is 0.08 tons, which has a significant carbon reduction effect. Therefore, the development of EAF steel is an effective means to promote carbon emission reduction in the industry. The guiding opinions on promoting the high-quality development of iron and steel industry and other policies encourage the development of short process steelmaking. Scrap steel is the main carbon raw material for short process EAF steelmaking, which will significantly benefit from the growth of EAF steel production capacity. In 2021, China's steel-making scrap was about 233 million tons, accounting for 22.56% of the crude steel output. Compared with the international average of 36%, this level has great room for improvement; At the same time, China has entered the high growth cycle of automobile scrap, which will also become one of the important growth points of the scrap industry chain.
Valuation analysis and rating description
In view of the strong growth of the company's 2022q1 performance and the high operation of rare earth prices, we raised the company's profit forecast for 2022 and 2023. It is estimated that the company's net profit attributable to the parent company from 2021 to 2023 will be 532 million, 775 million and 1.024 billion respectively, corresponding to PE of 20x, 14x and 10x. The continuous release of the company's rare earth recovery capacity is expected to promote the continuous high growth of performance and maintain the "recommended" rating.
Risk tips:
Rare earth prices fluctuate more than expected, and there is a risk of ineffective control of scrap steel and elevator gross profit margin.
