Valin Steel (000932) Interim Performance Review: Earnings complement peers’ concerns about overall listing of steel assets
Report Summary: Incident: The company released the first half of 2019 results, and the report states that the company achieved total operating income of 484.
$ 4.1 billion, an annual increase of 11.
19%, achieving net profit attributable to shareholders of listed companies.
37 trillion, down 34 a year.
The production and sales volume reached a record high, and the per capita steel output ranked the advanced level.
The company strengthened the refinement operation. The synergy effect before and after the iron release was released, and the steel output increased in the first half of the year.
45%, reaching 989.
As of the end of June 2019, the labor coordinates of Hualing Xianggang and Hualing Liangang were 1,160 tons / person-year and 1,158 tons / person-year, respectively, an increase of 5% and 8% earlier.
The calculated per-ton steel output per listed steel company in 2018 was 767.
4 tons / person-year, the company has already reached the advanced level in the industry.
Cost reduction is considerable, and profits can be consolidated with peers.
As a result of the report, the company continued to make improvements in the main economic and technical indicators of benchmarking potential cost reduction, coal injection ratio, blast furnace utilization factor, unit consumption of molten iron, etc., and increased production by 12%.
Against the background of 45% and iron ore prices, operating costs increased by only 15%.
The company maximizes profits37.
380,000 yuan, down by 16 every year.
09%; Net profit attributable to shareholders of listed companies.
37 trillion, down 34 a year.
94%, the decline is greater than the decline in the company’s profit maximization, essentially: First, because the company’s core subsidiaries have not made up for their previous annual expenses in the first half of 2018, they do not need to pay corporate income, and they have paid this year, Affecting 2019H1 profit 2.
3.8 billion; Second, the company dated six debt-to-equity implementation agencies to 32.
The 8 trillion capital increase in “Sangang”, the transition before the completion of the reorganization, the company’s shareholding in “Sangang” has gradually decreased.
The regional supply and demand structure is healthy, and core products maintain high gross margins.
The company is located in the central and southern region of the region. The actual volume of steel in Hunan Province is basically stable at around 2000 each year, while the total steel consumption is above 2800, which is a net inflow of steel.
With the rise of the central region, the national strategy of the Yangtze River Economic Belt and the “Belt and Road” has been further advanced. Hunan and its surrounding areas, especially Guangdong, Hubei, Chongqing and other places, have witnessed rapid development of construction machinery, automobile, equipment manufacturing and other manufacturing industries.Continued growth.
In the reporting year, the company’s wide and heavy plates, hot-rolled steel varieties, and seamless steel pipes still maintained high gross profit margins; the auto plate company achieved a net profit of 75.36 million yuan in the first half of the year, a 122% increase from the profitability of the whole year in 2018.
70%; 2019H1 achieved a net profit of about 226 yuan per ton of steel.
Due to the relatively high proportion of sheet metal, the second-quarter performance was slightly worse than that of long products.
The company achieved net profit attributable to mothers in the second quarter12.
02 trillion, an increase of 1 trillion from the previous month, increasing the ton per ton steel net profit improvement is only 20 yuan / ton, the degree of improvement is weaker than the long products companies that have already announced interim results, gradually the company mainly uses sheet metal as the main product.The improvement in the average selling price was weaker than that of long products such as rebar, such as rebar, hot-rolled, medium plate, and cold-rolled products. The average prices in the second quarter were 4242, 4185, 4166, and 4321 yuan / ton, respectively, which increased by 237 from the first quarter., 185, 169 and 105 yuan / ton.
Financial expenses have dropped significantly, and cash flow from operating activities has turned negative.
Termination of the company’s assets and liabilities at the end of the reporting period60.
40%, an earlier decrease of 4.
With 72 assets, the asset-liability ratio has returned to a reasonable level.
The financial expenses of companies in 2019H1 have fallen by 48 per year.
03%, bringing 3 to the company.
8.3 billion benefits.The negative cash flow generated from the reported company’s operating activities was mainly due to the fact that the member units gathered by the finance company absorbed deposits and decreased significantly.
It is proposed to acquire equity in subsidiaries to enhance overall profitability.
The company intends to issue shares to purchase debt-to-equity implementing agencies and minority shares in “Sangang” held by Hualing Group, and 成都桑拿网 to acquire 100% equity of related party Hualing Energy Conservation in cash.
After the acquisition was completed, “Sangang” and Hualing Energy Saving became wholly-owned subsidiaries of the company.
Nine counterparties issued shares to purchase Hualing Xianggang 13 in total.
68% equity, Valin Liangang 44.
17% equity, Valin Steel Pipe 43.
42% equity, the underlying asset is priced at 104.
66 ppm, the additional stock price is 4.
58 trillion, or 22.
8.5 billion shares, the total share capital of the company after the completion of the additional is 65.
07 billion shares.
From January to May 2019, Valin Xianggang achieved sales of 402 and net profit of 12.
500 million; Valin Liangang achieved initial sales of 381 and net profit of 12.
400 million; Valin Steel achieved sales of 62.
9 Preliminary, realized net profit 3.
0 ppm; Valin Energy achieved net profit of 0.
8.6 billion yuan.
After the reorganization is completed, “Sangang” will become a wholly-owned subsidiary of the company, and the annual net profit attributable to shareholders of the listed company after a rough reorganization will increase accordingly.
At the same time, in order to make up for the dilutive immediate income, the company has signed the “Framework Agreement on the Acquisition of Yangchun New Steel Co., Ltd.” with Xiangsteel Group. It intends to acquire the controlling interest in Yangchun New Steel held by Xiangsteel Group in cash.Xingang achieved initial sales of 314, with net profit attributable to the parent company of 10.
Formulate profit distribution policies and actively return to shareholders.
The company formulated the “Shareholders’ Return Plan for the Next Three Years (2019-2021)”, which clearly states that “after the company’s annual profit and progressive undistributed profits are positive, and statutory public reserve funds are required, the company will actively invest in cash distribution methods.
The company’s cash distribution in the past three years is in principle more than 30% of the annual distribution profits realized in the last three years; and in the case that cash can meet the company’s continuous operation and long-term development needs, the cash dividend scale (including the medium-term(Distributed cash dividends) shall not be less than 20% of the company ‘s net profit attributable to shareholders of the parent company in that year. ”
According to market consensus, the company’s PE (TTM) and 2019 PE are 3 respectively.
7. The estimated level is low, and a high and stable dividend ratio can guarantee a high exchange rate.
Profit forecast and investment rating: We expect the company to achieve operating income of 977 from 2019 to 2021.
37 ppm, 948.
7.6 billion and 975.
04 billion; net profit attributable to mothers was 40.
4.6 billion, 41.
6.1 billion, 44.
30 ppm (prior value 53).
34 and 57.
11 ppm, lowered mainly due to the increase in cost of iron ore prices; EPS is 0.
96 yuan, 0.
99 yuan and 1.
05 yuan, the corresponding PE is 4.4X, 4.
2X and 4.
0X, maintain “strongly recommended” level.
Risk warnings: 1. The prices of upstream raw materials have risen sharply; 2. Supply-side reforms have fallen short of expectations.