Sangang Minguang (002110) Company Comments: Significant improvement in fourth quarter earnings
Event On February 25, the company released the 2019 annual results report: the company achieved net profit attributable to mothers in 201936.
7.6 billion, down 43 each year.
51%; net profit attributable to mothers in the fourth quarter8.
51 ppm, an increase of 30 from the previous month.
Realize basic income during the year1.
50 yuan / share, adjusted to 2 last year.
65 yuan / share.
The downstream demand as a whole is relatively stable and the fourth quarter performance has increased sequentially from the fourth quarter of 2019, and the company achieved revenue of 136.
8.2 billion, an increase of 6 from the previous month.
06%; net profit attributable to mother 8.
51 ppm, an increase 杭州桑拿 of 30 from the previous month.
In the fourth quarter of 2019, the demand for downstream building materials was overall stable, and the demand side was adjusted to the rebar profit level. The average gross profit of rebar in the first quarter of the year was 741 yuan / ton, 728 yuan / ton, 400 yuan / ton, and703 yuan / ton.
The company, as a regional leader in building materials products, is an iron and steel company based on products other than profitability. According to preliminary comparison, the net profit attributable to mothers in the fourth quarter of 2019 also improved significantly in the third quarter.
Initial results were in line with expectations, the output increased and the cloud business project supported revenue in 2019, and the company achieved revenue of 455.
10,000 yuan, an annual increase of 25.
53%, achieving a net profit of 36.
76 ‰, a decrease of 43 per year.
The increase in revenue was mainly due to the increase in the company’s steel output and the increase in revenue of Fujian Minguangyunshang, a subsidiary of the company.
However, since 2019, the release of supply has led to an increase in the excess of the industry, and the national crude steel and steel output reached 99,634 lengths and 120,477 lengths, respectively, and increased by 8 at the same time.
8%, steel prices are under pressure.
The rise in prices of raw materials such as iron ore, the profitability of the steel industry has shrunk, and the company’s performance has met expectations.
The epidemic situation may affect the first quarter, but the fundamentals are already improving due to the outbreak of the Spring Festival epidemic, the country has implemented shutdowns and production stops, and actual steel demand has stagnated.
As of last week, the national steel stocks totaled 3,428.
27, a record high.
Among them, the steel plant inventory is 1285.
The 02 name is also a record high.
However, due to high inventory and cash flow, the long process has begun to reduce production continuously.
59%, the rebar production is 300.
37 for the first time, 281.
59 for the first time, 264.
The effect of reducing production has begun to appear, and the growth rate of inventory has begun to decline.At the same time, restarting through downstream demand, demand is also improving on the margins.
We believe that Fujian Province is one of the provinces with a relatively low epidemic in the country. At the same time, it is also one of the deadliest construction industry resumption provinces in terms of high temperature.
Investment advice We think the company’s EPS for 2020-2021 will be 1.
60 yuan / share, 1.
78 yuan / share, the corresponding PE is 5 respectively.
53. The company’s overall operation is stable and it maintains a “Buy” rating.
Risk reminder: The prices of upstream raw materials continue to rise, the epidemic situation has caused a sharp decline in demand, and the company’s own operating risks.