\u3000\u3 China Vanke Co.Ltd(000002) 057 Sinosteel New Materials Co.Ltd(002057) )
All business segments of the company achieved stable growth, and the magnetic materials and testing business continued to expand their layout. In 2021, the company achieved an operating revenue of 2.588 billion yuan, a year-on-year increase of 54.76%; The net profit attributable to the parent company was 214 million yuan, a year-on-year increase of 23.56%; The net profit deducted from non parent company was 173 million yuan, with a year-on-year increase of 17.72%. The main reason for the great increase in the company's performance is that the business of each sector has achieved stable growth, the layout of magnetic material industry has been accelerated, and the testing business has been expanding. In the first quarter of 2022, the company achieved an operating revenue of 691 million yuan, a year-on-year increase of 43.73%; The net profit attributable to the parent company was 619232 million yuan, a year-on-year increase of 122.18%; The net profit deducted from non parent company was 450798 million yuan, with a year-on-year increase of 145.12%.
Expand production capacity and gradually increase the production and sales of magnetic materials business in large quantities. Benefiting from the company's accelerating layout and developing high-quality customers in the field of magnetic materials, the production and sales of magnetic materials business were booming and the revenue increased significantly in 2021. In recent years, the company's capacity expansion has accelerated. In 2021, it added 5000 tons of electronic grade manganese trioxide and 5000 tons of ferrite permanent magnet. At present, it has a capacity of 55000 tons of manganese trioxide (including 50000 tons of electronic grade manganese trioxide and 5000 tons of battery grade manganese trioxide), 20000 tons of permanent ferrite devices, 5000 tons of soft magnetic devices and 2000 tons of rare earth permanent magnetic devices. The company is the world's largest producer of high-purity manganese trioxide and the only listed company with soft magnet, ferrite permanent magnet and rare earth permanent magnet at the same time; In the future, the demand for magnetic materials is strong, and the diversified layout is expected to help the performance achieve leapfrog development.
Continuously expand the business scope and service area, and the detection business continues to grow at a high rate. The company is the only infrastructure testing institution with full license and nationwide layout in China. In 2021, the testing business achieved a revenue of 449 million yuan, a year-on-year increase of 20.68%, contributed a gross profit of 223 million yuan, a year-on-year increase of 15.54%, accounted for 37.99% of the gross profit, and the gross profit margin decreased slightly from - 2.23% to 49.52%, still in the leading position in the industry; At the same time, the company's infrastructure testing business continues to expand. In 2021, it acquired Jilin Zhengda to enter the field of highway testing, and continuously set up molecular companies and offices to build a national testing service network. China's third-party testing market is in a stage of rapid development. In 2021, the market scale exceeded 400 billion, with a growth rate of more than 12%. In the future, the scale of infrastructure testing field is expected to reach 150 billion. Seizing the development opportunity of the industry, the company's testing business is expected to achieve leapfrog development.
Baowu trusteeship benefits the company's development and market-oriented reform to stimulate business vitality. Baowu has entrusted the controlling shareholder of the company - Sinosteel group. In the future, Baowu is expected to supply high-quality iron red for the company and share downstream customer resources in the magnetic material industry with the company; With the cooperation of both sides, the company is expected to usher in accelerated growth. In addition, the company has always adhered to market-oriented reform, equity incentive has been implemented, and a reward and restraint mechanism has been established to further stimulate the company's business vitality.
Investment suggestion: the company has been deeply cultivating magnetic materials for many years, and has arranged soft magnetic, ferrite permanent magnet and rare earth permanent magnet at the same time, which is the absolute leader of manganese trioxide; In the field of testing, the company is an underestimated giant in the infrastructure engineering testing industry, and its production capacity and performance are expected to continue to grow at a high speed in the future. The company's operating revenue is expected to reach RMB 3.232 billion, RMB 4.029 billion and RMB 5.285 billion from 2022 to 2024, the net profit attributable to the parent company will reach RMB 287 million, RMB 365 million and RMB 441 million respectively, and the EPS will be 0.38, 0.49 and 0.59 respectively. Maintain the "buy" rating.
Risk tip: the production capacity of magnetic materials is less than expected, the downstream demand is less than expected, and the price rise of raw materials is less than expected. The growth of testing business is less than expected
