\u3000\u3000 Citic Pacific Special Steel Group Co.Ltd(000708) (000708)
Events
On January 15, the company released the performance forecast for 2021. It is estimated that the operating revenue in the 21st year will be 98.57 billion yuan, with a year-on-year increase of 29.43%; The net profit attributable to the parent company was about 7.951 billion yuan, a year-on-year increase of 31.82%.
Commentary
The company’s annual performance increased steadily, and its revenue and net profit increased. In the past 21 years, the company’s product sales volume has been strong. The company has continuously optimized the product structure to ensure excellent product sales data throughout the year. In the face of the rise of raw materials, the company has timely adjusted the market price, and fully transmitted the downstream cost; On the cost side, the company continues to reduce costs and increase efficiency and control cost growth.
Corresponding to the highly decentralized downstream, weak periodic logic has high growth. The company’s production capacity is huge, and the downstream is relatively scattered. High end equipment manufacturing industries such as automobile, engineering machinery, military aviation, oil exploitation and energy are involved. The demand fluctuation of a single industry has little impact on the company’s overall sales. In the past 21 years, benefiting from the first recovery of China’s manufacturing industry, downstream customers reported that demand was generally good and there were sufficient orders on hand. In the long run, as the cornerstone of high-end manufacturing, the special steel industry has broad space for long-term import substitution and will be improved in the future. At present, the company has a production capacity of more than 14 million tons of special steel. It is the largest leading enterprise among the listed special steel companies. It is expected to obtain a competitive advantage in the era of long-term growth of special steel.
“Three high and one special” and seamless pipe are expected to achieve a breakthrough next year. The company’s “three high and one special” products have a sales volume of 50000 tons in 21 years. High strength steel has achieved breakthrough in 21 years, with sales increasing by 100%. In 22 years, the company’s target of Superalloy + high strength steel is 10000 tons, and the long-term target is 20000 tons. The capacity of Tianjin steel pipe acquired by the company has been affected by the export tax rebate policy and energy consumption in Beijing, Tianjin and Hebei for 21 years. The output release is only half of the capacity. It is expected that the output is expected to improve marginally next year.
Profit forecast & investment suggestions
According to the performance forecast for the 21st year, considering the price increase of some products this year and the slight increase of sales volume, the revenue growth slightly exceeded the expectation. The revenue of the 21st-23rd year was increased by 20%, 11.5% and 11.8%, and the net profit was increased by 3%, 6.2% and 5.8%. It is estimated that the company’s revenue from 2021 to 2023 will be 98.42 billion yuan, 98.74 billion yuan and 102.08 billion yuan respectively, the net profit attributable to the parent company will be 7.96 billion yuan, 8.86 billion yuan and 9.68 billion yuan respectively, and the EPS will be 158 yuan, 176 yuan and 192 yuan respectively, and the corresponding PE will be 13 times, 11.7 times and 10.7 times respectively. Maintain the “overweight” rating.
Risk tips
Product price fluctuation risk; The risk of overseas demand decline caused by the epidemic; Risk of lifting the ban on restricted shares.
