Valin Steel (000932): Second quarter net profit improved month-on-month increase in capital increase and quality improvement and efficiency projects promote stable future performance
The company released the semi-annual report for 2019, and the company realized operating income of 484 in the first half of the year.
41 ppm, an increase of 11 in ten years.
19%; net profit attributable to shareholders of listed companies22.
3.7 billion, down from -34 previously.
94%; realized expected return of 0.
53 yuan, down from -34 previously.
Our analysis and judgment (I) Rising costs The decline in steel prices affects the company’s performance, and the second quarter’s performance has improved significantly. The significant indicators in the first half of the year were caused by the rise in iron ore cost prices and supply-demand imbalance in steel prices.Overall profit.
The average national rebar price in the first half of 2019 was 3997.
17 yuan / ton, temporarily down by 19.
85 yuan / ton, a drop of -0.
In fact, the average price of Qingdao Port iron ore is 652.
35 yuan / ton, up 193 previously.
98 yuan / ton, an increase of 42.
In the first half of the year, the company’s steel production and sales increased slightly, of which the output reached 990 inches, which increased by 12.
45% of sales in the year 1004, an increase of 12 per year.
Through volume increase and price increase, the company’s performance reflects better operating performance, and the net profit attributable to mothers improved to 11 in the second quarter.
4.5 billion, an increase of 4 from the previous quarter.
The company reduced costs and increased efficiency through the promotion of intelligent manufacturing and informatization, and improved production efficiency. The production efficiency of Hualing Xianggang and Liangang were 1160 tons / person-year and 1158 tons / person-year, respectively, which increased by 5% earlier.And 8%.
At the same time, by adjusting the product structure, actively seizing market opportunities with strong demand in industries such as oil and gas pipelines, some hedging the decline in prices of ordinary steel brought pressure on performance changes, and the company’s seamless steel pipe product gross margin reached 16.
63%, an increase of 0 in one year.
05 averages, gross profit reached 8.
3.9 billion, up 22% previously.
(II) Limitation of production suspension and suppression of production expansion Expansion of the cost of iron ore, the industry and the company’s profits are recovering, the industry’s supply and demand fundamentals in the second half of the year will have a certain supporting effect on steel prices.
As Tangshan and Wu’an and other iron and steel towns have successively introduced production restriction policies during non-heating seasons, the rapid expansion of the steel supply end in the first half of the year will be suppressed in the second half of the year.
According to statistics from the National Bureau of Statistics, crude steel output increased by 57706 in the first 7 months, increasing by 9 year by year.
0%, while the most recent July output was 8522, an increase of only 5 per year.
0%, the output growth rate increased and narrowed, ending the industry’s continuous upward trend since April.
The expansion of production under the relaxation of environmental protection and strong demand has been realized in the early stage. Until the latest data in August, the operating rates of blast furnaces and electric furnaces were reduced to 68.
09% and 68.
59%, ranked June data, fell by 3 respectively.
04 and 4.49 averages.
Taking into account the limit of environmental protection and the expansion of the 70th National Day, the marginal expansion of output growth may be even longer.
At the same time, downstream steel demand remains strong. Against the backdrop of counter-cyclical adjustment policies, 淡水桑拿网 infrastructure recovery will support industry demand.
At the same time, with the rebound of iron ore imports and port inventory, the price of iron ore must return to a reasonable basis.
The volume of iron ore imports increased by 1 in July.
2%, a month-on-month increase of 1584 tons, single-month import volume increased significantly in August domestic iron ore port inventory1.
1.8 billion tons, an increase of 200 mm from the previous month.
The average price of Qingdao Port iron ore in August was 748.
25 yuan / ton, down 91 from the previous month.
36 yuan / ton, a decrease of 10 yuan.
With the arrival of the traditional peak season for consumption in the third and fourth quarters, the stability of steel prices and falling iron ore prices will be 重庆耍耍网 the basis for the recovery of industry and company profits.
(3) The construction of capital increase subsidiaries and quality improvement and efficiency improvement projects will consolidate the company’s future growth. The company’s operating goal in 2019 is to replace steel production in 1985 with an increase of 8.
12%, higher than the average growth level of the industry.
The company dated six market-oriented debt-to-equity implementation agencies to 32 in December 2018.
8 trillion capital increase for “Sangang” (Hualing Xianggang, Hualing Henggang, Hualing Liangang).
The restructuring work is currently approved by the CSRC, and the completion of the acquisition will help increase the company’s performance.
The balance of minority shareholders’ equity at the end of the reporting period was 19.
5.6 billion yuan (Xianggang), 46.
1.5 billion (Liangang) and 11.
17 ppm (Henggang), equivalent to 3 of the net profit attributable to the mother for the period.
In addition, due to the high prosperity of the oil and gas pipeline and other industries, grabbing high-price orders, high-margin oil and gas pipelines will support the company’s performance. At present, it is the Russian Yamal project, the Shenhua Ning coal-to-oil project, the Saudi Aramco project, and Liwan Deep Sea石油项目、巴基斯坦N-J 水电站项目、中亚天然气管道C 线等项目供货。The company is under construction for a series of technical transformation projects, including Hunan Iron and Steel’s continuous bloom caster, Liangang’s bar-line heating furnace high-efficiency transformation and supporting facilities construction project, Henggang’s intelligent manufacturing and automation transformation, information transformation,All are conducive to improving quality and efficiency.
Investment suggestion The company has a clear strategic direction in increasing capital and improving quality and efficiency. Benefiting from the continuous improvement of the industry supply-demand relationship and the decline in iron ore costs, it will help support steel prices and the company’s performance.Yu stable.
The company’s capital increase in the projects of Hualing Xianggang, Hualing Henggang, and Hualing Liangang has steadily advanced, and its future development space will also be expanded to support the company’s gradual improvement in the future.
We expect the company’s EPS to be zero in 2019-2020.
05 yuan, corresponding to PE for 2019-2020 is 4.
30x / 4.
01x, given a “cautious recommendation” rating.
Risk prompts 1) Steel prices have fallen sharply; 2) Demand for downstream real estate and infrastructure has fallen significantly; 3) The company’s capital increase and technological transformation projects have been put into operation less than expected.