Sansteel Minguang (002110) 2019 Interim Report Review: 厦门夜网 Cost Increases Squeeze Profits and Coastal Layout Starts

Matters: The company achieved operating income of 189 in the first half of 2019.

20 ppm, an increase of 7 per year.

53%; net profit attributable to shareholders of listed companies is 21.

73 ‰, a decrease of 32 per year.

81%; basic profit income is 0.

886 yuan / share, a decrease of 32 per year.


  Comment: production, sales and prices: the company produced 511 steel in the first half of the year.

Initially, it increased by 17 each year.

7 Cobalt, steel 508.

35 inches, an increase of 18 inches each year, the company’s crude steel output has climbed upwards for four consecutive years.

Benefiting from the large-scale removal of ground steel in Fujian in 2017, Fujian steel enjoys a regional premium bonus.

The average prices of the company’s building materials and general board market were respectively higher than the average prices of Jiangxi, Guangdong, Zhejiang and Shanghai at 81 yuan / ton and 128 yuan / ton.

9 yuan / ton, compared with 3482 in the same period last year.

5 yuan / ton, an increase of 104 per year.

4 yuan, double increase in volume and price promoted the growth of operating income.

  Cost control: Iron ore prices rose 21 in the first half of the year.

6 US dollars / ton, the company adopts a flexible procurement strategy, and the comprehensive purchase price of imported minerals is lower than the average price of the Platts index of 5.

USD 65 / ton.

At the same time, the company flexibly adjusted the ratio of iron ore into the furnace and smelted 537 into the furnace in the first half of the year.

51 Initially, it fell by 2 each year.

2 nominal.

In addition, the Sanming Headquarters and Quanzhou Minguang achieved cost reductions of 17 tons per ton of steel.

78 yuan / ton of steel, 4.

44 yuan / ton of steel, a total cost reduction of 7147.

490,000 yuan.

In the case of rising original costs, the company adopted a variety of strategies to reduce costs flexibly, minimizing the gross profit bulge, maintaining 19.

High gross profit margin of 6% (ten years -9.


  Three fees: The company’s selling expenses in the first half of the year were zero.

600 million, an increase of 44 every year.

67%, mainly due to the annual increase in transportation and handling costs; financial costs were -0.

07 million, a decrease of -114 per year.

56%, mainly due to a 48% decrease in interest expenses and an increase of 132% in interest income; management expenses and R & D expenses exceeded changes by 0.

27% and -3.

23%, basically remained stable, and the three-fee expense ratio remained at the industry average level.

  The coastal layout has steadily unfolded, and high dividends are worth looking forward to.

In the first half of the year, the company announced that it intends to use cash to acquire the entire equity interest in Luoyuan Minguang from the group to facilitate coastal capacity replacement.In addition, the company reused 9.

At the price of 8.7 billion US dollars, the iron 104 link of Shanxi Iron and Steel Laiwu Xinjiang Company was purchased, and the steel production capacity was 100 tons. The auction price was higher than the previous 18.

1.4 billion has decreased significantly, and the company’s coastal layout has gradually expanded.

The company’s historical dividend ratio is relatively high. In 2017 and 2018, the cash dividend ratio was 38% and 50%, respectively. It is expected that the company will maintain a high dividend policy in 2019, and calculate the company’s total pre-tax distribution to 0 with a 40% dividend ratio.

74 yuan, RMB exchange rate 9.


  Earnings forecasts, estimates and investment ratings.

We estimate that the company’s operating income for 2019-2021 will be 37.27% / 37.4 billion (previous forecast was 36.97% / 38.7 billion), and the corresponding net profit attributable to mothers will be 45.



8.6 billion (previous forecast was 52.



1.3 billion), the corresponding EPS is 1.



9.9 billion (previous forecast was 3).



43 yuan), the corresponding PE is 4 respectively.



0 times.

The company’s excellent quality, dividends are high and stable. It is estimated that Fangda Special Steel, which is close to the first echelon, will be given a 6x estimate, and the target price is 11.

04 yuan, maintaining the “strong push” level.

  Risk warning: Sino-US trade frictions continue to rise, demand continues to expand, and iron ore prices rise.