\u3000\u3000 Zhejiang Yongjin Metal Technology Co.Ltd(603995) (603995)
It is expected that the net profit attributable to the parent company will increase by 39% to 48% year-on-year in 2021, maintaining the “buy” rating
On January 17, the company released the performance forecast for 2021. It is estimated that the net profit attributable to the parent company will reach RMB 575 million to RMB 615 million in 2021, with a year-on-year increase of 38.74% to 48.39%, and the net profit deducted from the non parent company will reach RMB 550 million to RMB 590 million, with a year-on-year increase of 45.17% to 55.72%. The company’s performance is in line with expectations. We maintain the company’s profit forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 597 million yuan, 915 million yuan and 1.197 billion yuan respectively, and the EPS will be 256, 3.93 and 5.14 yuan respectively. The current share price corresponds to 22.3, 14.6 and 11.1 times of PE from 2021 to 2023, maintaining the “buy” rating.
The continuous release of production capacity has helped the company maintain high performance growth
According to the company’s announcement, the rapid growth of the company’s performance in 2021 is mainly due to the significant increase in the production and sales of cold-rolled stainless steel sector and strip products, including the release of some production capacity of the company’s IPO raised investment projects, the partial production of Zhejiang relocation phase I project in the second half of 2021 and the full capacity release of Guangdong Yongjin and qingtuoshangke. Quarterly, the company’s net profit attributable to the parent company in 2021q1-q3 reached 111 million yuan, 173 million yuan and 152 million yuan respectively. At the same time, it is expected that the company’s net profit attributable to the parent company in 2021q4 will reach 139 million yuan to 179 million yuan. If the median value is 159 million yuan, it will increase by 2.32% year-on-year and 4.67% month on month. Under the disturbance of negative factors such as power and production restriction, the company’s Q4 performance continues to maintain a slight growth trend.
The new leading stainless steel cold rolling project has been promoted rapidly, and the performance has ushered in a continuous harvest period
In recent years, relying on the cost advantage, the company has continuously accelerated the pace of capacity expansion. In addition to the previous projects under construction / preparation, such as Jiangsu Yongjin, Vietnam Yongjin and Thailand Yongjin, the company announced the construction of Gansu Yongjin precision stainless steel sector and strip project with an annual output of 220000 tons and Indonesia Yongjin wide cold rolled stainless steel sector and strip project with an annual output of 700000 tons, so as to further layout the inland and Indonesian markets. At the same time, the diversification process of the company has also continued to accelerate. Part of the production capacity of the wide metal layered composite project with an annual output of 55000 tons and the stainless steel pipe and accessories project with an annual output of 100000 tons has been released successively at the end of 2021. With the successive implementation of projects under construction, the company is expected to enter the performance concentration release period.
Risk tip: the project commissioning process is not as expected, and the downstream demand has fallen sharply, etc.
