Sansteel Minguang (002110): Volume and price rise to support excellent performance, high dividends, high asset injection and expansion projects of the Group
Core points: 1.
Event company’s 2018 operating income was 362.
48 ppm, an increase of 14 in ten years.
40%, net profit attributable to mother 65.
07 million yuan, a decrease of 20 a year.
04%; realized expected return 3.
The company plans to pay a dividend of 20 yuan (including tax) for every 10 shares. At the same time, it plans to use the capital reserve to convert its capital into 5 shares.
Our Analysis and Judgment (I) Steel steel volume and price rise to support the performance, and the merger and acquisition of Sanan and low financial costs to increase profits of steel steel volume and price rise to support the company’s stable growth in performance.
The company’s steel output in 2018 was 959.
29 Initially, it increased by 52% in one year; the average national rebar price in 2018 was 4,177.
16 yuan / ton, an increase of 7 in the past.
Among them, the profitability of major products has improved, such as rebar, medium plate, steel for products, smooth round 深圳桑拿网 steel and construction discs with a gross profit margin of 30.
11% and 30.
03%, up 1 respectively.
44 and 0.
The financial cost advantage brought by low cost also supports the stable growth of the company’s performance.
The company’s financial expenses in 2018 were only zero.
600 million, a decrease of 41% previously.
In addition, in 2018, Sanan’s successful acquisition played a positive role in supporting performance.
2018 Sanan net profit 21.
4.3 billion yuan, with a profit margin of 19.
03%, 1 merger higher than the company’s overall profit margin.
(2) The relationship between the supply and demand of steel continued to improve, and the shortfall in infrastructure construction helped the demand and supply relationship for steel 北京桑拿洗浴保健 continue to improve, supporting the rebound in steel prices.
According to the China Iron and Steel Association, in 2018, the capacity was reduced by 3,000 tons, and the steel industry resolved the excess capacity during the “Thirteenth Five-Year Plan” period.
500 million tons of tasks; in addition, the industry should continue to deepen the supply-side structural reforms, focusing on preventing the resumption of production capacity that has been resolved, and strictly preventing the re-burning of “strip steel” and replacing supplementary production capacity.
The 2019 Hebei Provincial Government Work Report states that the steel production capacity in Zhangjiakou and Langfang will be withdrawn by 1,400 tons during the year.
Under the adjustment of the macroeconomic counter-cyclical policy, the total demand for steel has the potential for rapid development in areas such as infrastructure shortcomings and new energy vehicles.
During the two sessions, the Ministry of Finance stated that it would increase the scale of special bonds for local governments and planned to arrange special claims for local governments.15 trillion yuan, an annual increase of 800 billion yuan, focusing on supporting projects under construction and making up for shortcomings.
In addition, according to the Ministry of Housing and Urban-Rural Development of the People’s Republic of China, the design standards of the building are improved, and the replacement partial coefficient of the core mechanical structure is adjusted to enhance the reliability of the building or directly drive the demand for building steel.
At the same time that the expansion of steel production capacity is limited, the future demand for steel in the real estate sector has recovered to a certain extent. The growth in demand for infrastructure is worth looking forward to, supporting the upward fluctuation of steel prices in 2019.
(3) Intention to acquire group assets, bid for production capacity indicators and Zhangzhou Minguang Reproduction Project steadily advanced to become the future performance growth point of the company’s steel output in 2018 of 959.
In 29 months, the production and operation target for 2019 is the whole year of 1017, an annual increase of 6%.
According to the announcement of the company’s intention to acquire Luoyuan Minguang through cash in January 2019, the company is negotiating with various parties to advance the specific work of Luoyuan Minguang asset injection. If the acquisition is successful, the company’s steel production capacity can increase by about 190 to about 1150 microns.
The production capacity is expected to reach 20%.
In January 2019, the company successfully bid for 104 substitute pig iron capacity indicators and 100 gauge crude steel capacity indicators of Shanxi Iron and Steel Group Xinjiang Company, which has extended a good foundation for the company’s future capacity replacement and upgrade and capacity expansion.
In 2018, the company comprehensively promoted the upgrading and transformation of Zhangzhou Minguang equipment and facilities. Zhangzhou Minguang successfully put into production. At the end of the year, it has entered the heat load test phase. After the product inspection is qualified, it can enter trial production and produce.Production capacity is expected to produce 45 joints of steel in 2019.
In addition, the company actively promotes major projects such as sintered pellets, old coke ovens and 5 blast furnaces. After completion and operation, it is expected to further release capacity and increase company profits.
Investment suggestion: The company intends to acquire group assets, bid for capacity indicators, seek to expand production capacity, and change the strategic layout of Zhangzhou Minguang Reproduction Project. Benefiting from the continuous improvement of the industry supply-demand relationship, it is good for steel prices to rise and support the company’s performance.With the expansion of production capacity, the release of its performance will tend to stabilize.
The company intends to acquire Luoyuan Minguang, successfully bid for the 10,000-ton capacity index of Shanxi Iron and Steel in Xinjiang, and the construction of Zhangzhou Minguang’s resumption project construction has steadily advanced, and its future development space will also be expanded.
In 2018, the company’s dividend ratio was as high as 50.
25%, based on the company’s closing price of 18 on April 03, 2019.
55 yuan to calculate, the company’s precipitation replaced 10.
78%, an annual increase of 2.
Seven averages, exceeding market expectations.
We expect the company’s EPS to be 2 in 2019-2020.
21 yuan, corresponding to PE for 2019-2020 is 6.
3x / 5.
8x, maintain the “recommended” level.
Risk warnings 1) Steel prices have fallen sharply; 2) Downstream demand such as real estate and infrastructure has fallen short of expectations; 3) Asset restructuring, and new projects have been put into operation less than expected;