Sansteel Minguang (002110) Quarterly Report Review 2019: Decreased performance growth rate once again highlights profit potential

Sansteel Minguang (002110) Quarterly Report Review 2019: Decreased performance 天津夜网 growth rate once again highlights profit potential

The first quarterly report of 2019 officially disclosed that total operating income was 83.

47 trillion, a year ago -0.

45%, net profit is 9.

62 trillion, -33 a year ago.

02%, the basic EPS is 0.

59 yuan, the average ROE is 5.


Comment: The performance decreased by 28% month-on-month, only faster than Valin Steel (-16%) and Fangda Special Steel (-23%).

In the first quarter, the profits of the entire industry have decreased. Among the companies that have already disclosed their quarterly reports, only Hualing, Fangda and Sangang have shifted within 30%.

Valin Steel’s output has room for continued rise mainly due to the underutilization of its initial capacity.

Fangda and Sangang once again demonstrated their strong cost control capabilities.

Maintenance affects the company’s output.

In the first quarter, Quanzhou Minguang carried out a planned maintenance of 15 days in March. The output caused by the maintenance decreased, and the increase in the fixed cost per ton of steel cannot be ignored.

If the influence of maintenance factors is removed, the actual performance of the company should be at the current level.

The output will be increased after the maintenance in the second quarter.

The price of steel fell, the cost of raw materials rose, and the gross profit margin fell 11% month-on-month.

The price of steel decreased sharply on November 12, 2018. Although there was a slight rebound in the first quarter of 2019, the sales price of steel generally occurred at the same time. At the same time, the price of imported ore increased significantly in the first quarter due to the collapse of Vale in Brazil. Scrap and fuelThe price of other raw materials is also averaged each year. On average, the manufacturing cost of steel exceeds the rising cost, which has reduced the profit margin of steel production.

Profit forecast, estimation and investment grade: the company’s maintenance is over in the second quarter, and output is expected to increase. Subsequently, the impact of the Vale accident in Brazil will gradually change, and there will be room for cost reduction.

Volume and profit are expected to recover in the second quarter.

In addition, the company’s Zhangzhou Minguang equipment and facilities were upgraded last year. Zhangzhou Minguang successfully put into production, participated in the bidding for the iron and steel capacity index of Shanxi Iron and Steel Group Laiwu Iron and Steel Xinjiang Co., Ltd., and signed a strategic cooperation framework agreement with Fujian Yixin Steel Co., Ltd.Intention to acquire the entire equity of Fujian Luoyuan Minguang Iron & Steel Co., Ltd.

Constantly enlarge and strengthen the main iron and steel industry, and its subsequent performance is worth looking forward to.

We estimate that the company’s main business revenue for 苏州桑拿网 2019-2021 will be 36.97%, 37.7 billion (previous forecast was 33.45%, 36.4 billion), and the corresponding net profit attributable to mothers will be 52.



13 trillion (previous forecast was 49.



21 ppm), corresponding to an EPS of 3.



4.3 billion (previous forecast was 3.



62 yuan), the corresponding PE is 6/6/5 times.

The company’s excellent quality, high dividends and stability, it is expected to increase close to the first echelon of Baosteel Co., Ltd. and Fangda Special Steel, give 7 times valuation, raise the target price to 22.

47 yuan, maintaining the “strong push” level.

Risk warning: Iron ore is eroding profits of steel mills, and demand is less than expected.