An annual report forecast may also be a storm for the industry!
Inner Mongolia Baotou Steel Union Co.Ltd(600010) it was announced on the evening of January 11 that the company is expected to realize a net profit of RMB 2.44 billion-3.65 billion attributable to shareholders of Listed Companies in 2021, with a year-on-year increase of 501.05% – 799.11%. This report card looks great. However, the fact is not as simple as it seems. The company’s net profit attributable to the parent company in the third quarter was nearly 3.78 billion yuan. Thus, the company’s performance in the fourth quarter has suffered a loss, the maximum loss may be as high as 1.34 billion yuan, and the minimum loss may be nearly 130 million yuan.
The steel industry can be said to be a superstar in 2021. Bull stocks in this sector emerged one after another last year. The annual maximum increase of the steel index was nearly doubled, and the maximum increase of Inner Mongolia Baotou Steel Union Co.Ltd(600010) was nearly three times. In fact, from the perspective of single quarter profit, the profit level of the steel industry was the highest in the second quarter of last year, and most of them have declined in the third quarter. However, according to the performance forecast of Baotou Steel in 2021, the net profit has reached 5.14 billion yuan, which means that the difference between the actual profit and the market expectation may also reach 2 billion yuan.
In addition, another accident happened to a state-owned enterprise in Shanghai. According to Shanghai Industrial Development Co.Ltd(600748) announcement, according to the preliminary self inspection of the company, as of December 31, 2021, the unaudited accounts receivable of shangshilongchuang, the holding subsidiary of the company, totaled about RMB 2.615 billion, of which some businesses may involve financing trade, and the accounts receivable involved in such businesses may have unrecoverable risks. The company is stepping up further verification on the specific amount involved.
iron man who lost money in the first single quarter
On the evening of January 11, the Bull Stock Inner Mongolia Baotou Steel Union Co.Ltd(600010) in the iron and steel sector announced the performance forecast. It is expected that the net profit attributable to the shareholders of the listed company will be 2.44 billion yuan to 3.65 billion yuan in 2021, an increase of 2.034 billion yuan to 3.244 billion yuan compared with the same period of the previous year, a year-on-year increase of 501.05% to 799.11%; The net profit attributable to shareholders of listed companies after deducting non recurring profits and losses was 2.395 billion yuan to 3.582 billion yuan, an increase of 1.934 billion yuan to 3.121 billion yuan, a year-on-year increase of 419.50% to 676.98%.
Inner Mongolia Baotou Steel Union Co.Ltd(600010) said that in 2021, the steel and rare earth industry operated well, and the prices of steel and rare earth increased year-on-year. The company seized the market opportunity, took high-efficiency development as the goal, actively responded to the impact of rising prices at the raw material end and the downward pressure on the steel market in the fourth quarter, continuously innovated and optimized the production organization mode, strengthened cost reduction and efficiency increase, and vigorously adjusted the product structure, Continuously improve the operation and management level and efficiency level, significantly enhance the profitability, and significantly increase the operating performance year-on-year in 2021.
There are two points worthy of attention: the rise in the price of raw materials and the downward pressure on the steel market in the fourth quarter. This also means that the environment faced by the steel industry in the fourth quarter of 2021 is not friendly. In fact, the performance of Inner Mongolia Baotou Steel Union Co.Ltd(600010) also responded to this. The company’s net profit attributable to the parent company in the third quarter was nearly 3.78 billion yuan. If according to the company’s performance forecast, the company has suffered a loss in the fourth quarter, the maximum loss may be as high as 1.34 billion yuan, and the minimum loss is nearly 130 million yuan.
however, according to the performance forecast of Baotou Steel in 2021 by the Research Institute, it has reached 5.14 billion yuan, which means that the difference between the actual profit and the market expectation may also reach 2 billion yuan. It’s a little crazy.
The steel sector showed awesome power last year, and the biggest annual increase in steel index is nearly doubled. The market value of the whole steel plate exceeds 1 trillion and 200 billion, and Inner Mongolia Baotou Steel Union Co.Ltd(600010) ‘s biggest increase was nearly 3 times last year.
But in fact, from the perspective of single quarter profit, the profit level of the iron and steel industry was the highest in the second quarter of last year, and most of them have declined in the third quarter, taking Baosteel as an example.
what will happen to the steel industry this year?
According to the data of Haitong Securities Company Limited(600837) , in 2022, in addition to staggered peak production in heating season, other enterprises began to release production. The iron ring produced on Sunday increased by 55100 tons, an increase of 2.71%, still a year-on-year decrease of 15%. The weekly output of the five major steel products increased by 240000 tons, an increase of 2.62%, but still decreased by 12% year-on-year.
Inventory growth is not high. Last Friday, the warehouses of large steel plants increased by 180000 tons, including 50000 tons of thread, 110000 tons of wire rod and 20000 tons of hot-rolled cold plate and medium plate. The table needs to be narrowed. In the past four weeks, the annual growth rates of the five major steel products were – 11%, – 13%, – 17% and – 8% respectively, and the decline was significantly narrowed.
However, earnings continued to decline. Recently, the steel price has been basically stable, but the raw material price has increased slightly and the gross profit per ton of steel has decreased. Last Friday, the spot gross profit per ton of large steel decreased by 157-243 yuan, of which the medium plate decreased by about 243 yuan / ton. Haitong Securities Company Limited(600837) believes that it shows that the supply is gradually enlarged and the demand is gradually under the pressure of seasonal contraction.
The Ministry of industry and information technology has not yet made clear the production restriction of iron and steel in 2022. The annual meeting of the Ministry of industry and information technology has ended and did not mention the production restriction in 2022. It is expected that the staggered peak production in heating season and the temporary production restriction in high pollution weather may be retained, but the compulsory production restriction measures for production may depend on the planning of the general road map of carbon peak.
On January 10, LV Guixin, a first-class inspector of the raw material industry department of the Ministry of industry and information technology, pointed out at the third meeting of the Sixth General Meeting of China Iron and Steel Association that the “14th five year plan” for the development of raw material industry has been released recently, the guiding opinions on promoting the high-quality development of iron and steel industry and the implementation plan for carbon peak of iron and steel industry will be issued one after another. We should further promote the merger and reorganization of the industry and further improve the green, intelligent, high-end and service level of the industry. So, can this reverse the decline of the steel industry? It remains to be seen.
another explosion of state-owned enterprises in Shanghai
in addition to the steel sector, Shanghai state-owned enterprises have exploded.
According to Shanghai Industrial Development Co.Ltd(600748) announcement, recently, the company received the supervision letter from Shanghai Stock Exchange. According to the requirements of the supervision letter, the company carried out self inspection on the accounts receivable of Shanghai Shangshi longchuang Smart Energy Technology Co., Ltd. (hereinafter referred to as “Shangshi longchuang”), a holding subsidiary of the company. At present, the above verification is in progress.
According to the preliminary self inspection of the company, as of December 31, 2021, the unaudited accounts receivable of Shangshi longchuang totaled about RMB 2.615 billion, of which some businesses may involve financing trade, and the accounts receivable involved in such businesses may have unrecoverable risks. The company is stepping up further verification on the specific amount involved. The industry describes financing trade as “borrowing in the name of trading”.
As of the third quarterly report, Shanghai Industrial Development Co.Ltd(600748) the monetary funds in the account were 3.9 billion, notes and accounts receivable were 1 billion, and other accounts receivable were about 469 million. The net profit is 400 million yuan. If the above 2.6 billion yuan is not recovered and withdrawn in full, it may affect the performance of the company to a great extent.
Last year, the biggest thunder of state-owned enterprises in Shanghai was Shanghai Electric Group Company Limited(601727) , which is also related to accounts receivable. On May 30, 2021, Shanghai Electric Group Company Limited(601727) disclosed a major risk warning announcement that since the end of April 2021, the company has successively found that the accounts receivable of the holding subsidiary communication company are generally overdue. After collection, its customers have defaulted to varying degrees, and the collection has stagnated. At that time, the accounts receivable of the communication company was RMB 8.672 billion, the book inventory balance was RMB 2.23 billion, and the total shareholder loans provided by the company to the communication company were RMB 7.766 billion. The above situation has posed a significant risk to the company.
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(source: China Securities Company)
