Honglu Steel Structure (002541) Company Research: The rapid growth of steel structure manufacturing leaders will continue to strengthen the advantages of scale

Honglu Steel Structure (002541) Company Research: The rapid growth of steel structure manufacturing leaders will continue to strengthen the advantages of scale
Demand for steel structures has grown rapidly, and the industry’s supply and demand structure has improved.Long-term policies continue to promote steel structure construction, coupled with rising labor costs, prompting rapid development of prefabricated buildings and increasing penetration of steel structure buildings. The current market size of steel structures has reached US $ 670 billion, and industry demand has grown rapidly.At the same time, after 2015, the conversion steel price has gradually increased, and the business reform and environmental protection have become increasingly severe. The profits of some small and medium-sized steel companies have been shrinking and they have gradually withdrawn from the market. Focus on steel structure manufacturing and processing, scale effects, and refined management to build leading cost advantages.Different from listed companies in the same industry, the company’s core focus is on steel structure product processing and manufacturing interchange. It forms cooperative relationships with general contractors and engineering steel structure companies instead of simply competing to enjoy the industry’s growth to the greatest extent. In 2018, the company achieved an output of 143 tons, and the manufacturing scale of steel structures ranked first in the industry.Significant economies of scale and offset fine-grained control capabilities build the company’s leading cost advantage and help the company’s market share continue to increase. Expansion of production capacity enhances business undertaking capabilities and drives continued growth in the future.Since 2016, the company has laid out ten production bases nationwide. Since the economic transportation length of steel structure processing parts can reach 700-1000 kilometers, the company’s throughput can radiate most of the economic areas of the country.We estimate that the company’s current production capacity has reached 300 tons / year. After the completion of the basic real estate line, the production capacity will reach 400-450 tons / year. This will further enhance the company’s rapid response of steel structure processing and the collaborative processing capacity of large engineering projects, which will be converted into new capacityContinuous release is expected to continue to grow rapidly in the future. The effect of scale promotes the improvement of medium and long-term profitability.In the short term, due to the company’s new production capacity being successively launched, the sales of depreciation stalls accounted for a relatively high period, and the gross profit margin was at a relatively high 杭州夜网论坛 level.In the medium and long term, with the company’s maximum production capacity gradually climbing, the gross profit margin is expected to gradually rise.At the same time, the scale of expansion continues to expand. The company is also expected to strengthen upstream bargaining power through centralized procurement and deployment, optimize production arrangements, save transportation costs, and accept large high-margin orders, and continuously improve profitability. Investment suggestion: We predict that the company’s net profit attributable to the parent in 19/20/21 will be 4 respectively.5/5.4/6.8 trillion, EPS is 0.86/1.03/1.30 yuan (18-21 years, CAGR is 17.9%), the current sustainable corresponding PE is 12 respectively.4/10.3/8.Two times, taking into account the company’s excellent growth, scale advantages continue to be strengthened, maintaining a “buy” rating. Risk warning: less than expected risk of capacity utilization; risk of fluctuations in steel prices; increased competition risks.