Baosteel (600019) Interim Report Performance Review: Persist in Building the Right Leader and Focus on BMW Spillover Restructuring Spillover Effect
Event: The company released 2019 H1 results and reported that the combined company achieved total operating income of 1408.
7.6 billion, down 5 every year.
16%, achieving net profit attributable to shareholders of listed companies.
87 trillion, down 38 a year.
The profitability of Zhanjiang Base is on par with that of Baoshan Headquarters. “Rebuilding a Baosteel” continues to improve the supply capacity of leading high-end products.
According to the data disclosed by the Interim Report, we calculated that the company’s four major production bases, Zhongshan, Qingshan, Dongshan, and Meishan, respectively, achieved net profit of 20%.
700 million, 5.
700 million, 10 billion, 2.
900 million (40 in the same period last year.
4 billion, 8.
6 billion, 22.
3 billion, 15.
600 million), based on the annual production and sales of 1700, 1500, 850, 750 millimeter waves, the corresponding net profit per ton of steel is 243 yuan, 75 yuan, 235 yuan, 75 yuan.
From the above data, we can see that Zhanjiang’s profitability continues to align with the Baoshan headquarters, in line with consistent expectations. Zhanjiang’s product structure is constantly high-end, replacing Zhanjiang’s production costs should be lower than the Baoshan headquarters; Qingshan base shows performanceThe improvement in performance should be related to the gradual improvement of the cost reduction effect of advancement. There is room for improvement in the profitability of the headquarters of Qingshan, Meishan and Baoshan.
The construction of Zhanjiang No. 3 blast furnace system is advancing steadily. The hot-rolling project started on May 9, the cold-rolling project started on June 11, and the sintering project started on June 17. The expected production time is July 2021, when Zhanjiang will supplement the production capacity by 400The total annual output of pounds of molten iron will reach 1225 inches, and the scale and profitability will be close to Baoshan headquarters, achieving the goal of “rebuilding a Baosteel”. At the same time, the company’s supply capacity of high-end products such as automotive plates, appliance steel and electrical steel in South China will continueEnhancement has become an important performance growth point for the company in the next three years.
Leading steel companies that continue to reduce costs to create indicators will not change the nature of “cash cows” when the cycle goes down.
In 2018, the company set a cost reduction target of 10 billion for the next three years and challenged 13 billion.
The report cut the company’s cost reductions in the first half of the year31.
500 million, exceeding the annual target.
According to the data disclosed, the company’s operating cost per ton of steel in 2019H1 is 5,365.
9 yuan, down 62 from the same period last year.
7 yuan, to achieve such a result is the 2019 H1 iron ore Platts index exceeds 30.
8%, coal and coke prices remained high during the same period; during the period of 2019H1 ton steel, the cost was 378.
3 yuan, down 30 from the same period last year.
At present, the company’s production cost per ton of steel and period costs are still higher than the same industry level, but the difference with the industry level is narrowing. The gross profit margin is at an average level among similar products.
By continuing to reduce costs throughout the entire process of Qingshan, Baoshan and Meishan, the company is expected to regain its comparative advantage in profitability, which can not only support the company’s operating performance, but also greatly improve the company’s viability during the downward cycle.
Despite this year’s performance growth, the company’s operating cash flow is still abundant, with a net increase in cash and cash equivalents in the first half of 201911.
6 trillion, of which net cash flow from operating activities is 94.
4 ‰; the company’s financial expenses decreased by 9 compared with the same period last year.
Baowu Group will reorganize Maanshan Iron and Steel Group, and Baowu will further increase its market share in high-end products such as automotive panels, home appliance steel and electrical steel.
In June, Maanshan Iron and Steel announced that China Baowu Iron and Steel Group implemented a strategic reorganization of Maanshan Iron and Steel Group, and Anhui Provincial SASAC transferred 51% of Maanshan Iron and Steel Group to China Baowu for free.
Through this reorganization, China Baowu will directly hold 51% equity of Maanshan Iron and Steel Group and indirectly become the controlling shareholder of Maanshan Iron and Steel.
Maanshan Iron and Steel Co., Ltd. is a large-scale iron and steel joint venture in China and an important iron and steel production base. It has an annual output of 950 tons of sheet steel, of which about 240 is automotive steel. The output of automotive steel has been increasing year by year., Newly opened the market of two major automotive brands, Changan and Dongfeng, and the gap between the top level in the industry has narrowed. Anhui, as a home appliance production base, has provided a good downstream market for the development of home appliance panels by Maanshan Iron & Steel.The output accounted for 39%, 21%, and 27% of the country, respectively, and the proportion was relatively high. The annual output of home appliance steel by Maanshan Iron & Steel Co., Ltd. reached 180 tons, accounting for about 15% of the country’s total.50-60 ounces.
After Baowu reorganizes the Maanshan Iron and Steel Group, the annual production capacity of Baowu Department in automotive steel, home appliance steel and electrical steel will reach 1,500 tons, 1,000 tons, 450 tons, respectively.The ability to market risks will be enhanced, and the spillover effect of the reorganization will promote the improvement of the performance of listed companies in Baowu Department.
The gross profit margin of cold-rolled products hit a new low since listing, and spillover from restructuring effects will help bottom out.In the first half of the year, the country ‘s crude steel output increased by nearly 10% each year, and demand growth mainly revolved around the construction industry. As the company ‘s main downstream passenger car market output, sales fell by 13 respectively.
In the first half of the year, the China Steel Association’s steel price composite index was 109.
5, down 4 each year.
6%, while the plate price index fell by 6.
The company’s comprehensive gross profit margin for steel manufacturing units has been decreasing year by year5.
4 units, of which the gross profit margin of cold rolled and hot rolled products are 11 respectively.
4%, a decrease of 4.
The gross profit margin of 1 unit, especially for cold-rolled products, has been lower than its historical low in 2015.
We believe that in the second half of the year when the base number reached a certain number in the same period last year, the production and sales of cars will gradually narrow down every other period of time.The demand for auto plates will gradually improve, and at the same time, the profitability of cold-rolled products will promote bottoming out due to the spillover effect of BMW’s restructuring.
In addition, as the capital expenditure for exploration and development of the “three barrels of oil” maintained rapid growth, the demand for steel pipe products continued to improve, and the company ‘s steel pipe product gross profit margin increased against the trend. The company ‘s steel pipe product reported a gross profit margin of 12.
9%, an increase of 0 compared with the same period last year.
Five averages, close to the best level in history in 2009.
The prices of key products increased in the second quarter, and profitability in the second half of the year will remain stable.
In terms of quarters, the company realized net profit attributable to mothers in the second quarter34.
61 ppm, an increase of 7 from the previous quarter.
3.5 billion US dollars, initially in the second quarter,四川耍耍网 the ex-factory prices of major products have been increased. According to the official product price adjustment information released by Baosteel, we have summarized the hot rolling, ordinary cold-dip galvanizing, galvanizing, non-oriented silicon steel, and oriented silicon steel for 6 months.Compared with the previous 3 months, the prices have increased by 300, 300, 350, 300, 300 and 200?
700 yuan / ton.
At present, the ex-factory prices of the company’s main products in the third quarter have been announced. According to statistics, the September prices of hot-rolled, cold-rolled, hot-dip galvanized, electro-galvanized, non-oriented silicon steel, and oriented silicon steel have increased by 50 from the previous month.250, 250, 250, 150, 200 yuan / ton.
In terms of raw material prices, the average price index of 62% iron ore CFR (Qingdao Port) was US $ 82/104/109 in the first quarter, the second quarter and July-August. The increase in the cost of iron ore will be reflected in the third quarter.To a certain extent, it has hedged the positive impact brought by the company’s increase in product prices. At the same time, iron ore suppliers such as Vale will increase their shipments in the second half of the year to break through the trend of iron ore prices.
Profit forecast and investment grade: We expect the company to achieve operating income of 3005 from 2019 to 2021.
1 ppm, 2899.
71 ppm and 2966.
2.5 billion; net profit attributable to mothers is 125.
9 billion, 142.
8.6 billion, 168.
2.4 billion (earnings 175.
42 and 203.
94 ppm, lowered mainly due to higher costs caused by rising iron ore prices and lower than expected car plate demand; EPS is 0 respectively.
57 yuan, 0.
64 yuan and 0.
76 yuan, the corresponding PE is 10.
18X and 7.
80X, maintain “highly recommended” level.
Risk warnings: 1. The prices of upstream raw materials have risen sharply; 2. The downstream demand has exceeded expectations.