\u3000\u3000 Zhejiang Yongjin Metal Technology Co.Ltd(603995) (603995)
Key investment points
The new production capacity was promoted smoothly, and the scale of the company continued to expand
In 2021, the downstream demand of the company’s products is strong and the orders are sufficient. The company adheres to the synchronous two-way locking mode to avoid the risk of price fluctuation in the raw material market and operate steadily; At the same time, part of the company’s IPO raised investment projects were released, part of the Zhejiang relocation phase I project was put into operation in the second half of the year, the full capacity of Guangdong Yongjin and qingtuoshangke was released, and the company’s output increased significantly.
The variety structure was continuously optimized and the profitability was enhanced
In 2021, the company will continue to focus on the production and operation of its main business and is committed to providing customers with better products and services. Through the adjustment of product structure, the company will continuously improve the production and operation management and high-quality development level, and its profitability will be significantly enhanced. In the future, high profit precision cold rolling, stainless steel water pipes and overseas projects will be put into operation one after another, which will further optimize the company’s product structure, increase the market share of high value-added products, and steadily increase the company’s profitability.
Performance growth fulfills the company’s Growth Logic
The company’s performance in 2021 will be realized logically. According to the company’s future new project planning, the realized volume increase logic in 2021 will gradually form a dual growth driving force of “profit thickening + scale growth” in the future. We believe that the company’s new projects are recommended in an orderly manner, and the downstream stainless steel market space is huge. Combined with the company’s own cost, scale and efficiency advantages, the company’s leading position will be more stable.
Profit forecast and valuation
As the leader of cold-rolled stainless steel, the company has a stable profit space. The continuous increase of production capacity will continue to help the company’s performance growth. It is estimated that from 2021 to 2023, the company’s operating revenue will be 258.63/350.92/455.22 yuan respectively, and the net profit attributable to the parent company will be 584/811/1.040 billion yuan, with a year-on-year growth rate of 40.93%, 38.80% and 28.32% respectively, and the corresponding EPS will be 2.51/3.48/4.46 yuan respectively. According to the closing price on January 17, the corresponding PE is 22.83/16.45/12.82 times respectively. The company has high growth certainty and maintains the “buy” rating.
Risk tips: the construction and operation of new projects are less than expected, the downstream demand is less than expected, and the company’s business governance.
