Valin Steel (000932): Second quarter profit increased
Investment Highlights Performance Summary: The company released the 2019 semi-annual performance forecast and reported that the company achieved operating income of 483.
8 ppm, an increase of 11 in ten years.
28%; net profit 32.
800 million, down 20 a year.
02%; net profit attributable to shareholders of listed companies22.
100 million, down 32 a year.
73%, equivalent to 0 EPS.
55 yuan; if excluding the effect of the six minority holdings of “Steel” held by the six debt-to-equity implementing agencies, the net profit attributable to shareholders of the listed company is expected to be 24.
800 million US dollars, an average of 24 in ten years.
88%; QoQ growth in the second quarter: According to the company’s latest performance forecast, it is expected to achieve net profit in a single quarter in the second quarter.
1.3 billion, up 9 from the previous month.
70%, a ten-year average of 23.
According to the company’s voluntary disclosure of production and operation, the total sales volume of steel products from April to June was 496, equivalent to a net profit of 345-366 yuan per ton of steel in the second quarter, an average of 47 yuan from the first quarter, and a semi-annual average net profit of 327-337 steel.The average profit interval in 2018; the first half of the year fell by 147 yuan; the company’s profit level is better than the industry average: according to our calculations, cold rolled, hot rolled, rebar and plate 2019Q2 ton steel gross profit changes by 27 yuan, -100 Yuan, 53 Yuan and -16 Yuan, 2019H1 corresponds to a ton of steel gross margin 2018H1 intervals of 500 Yuan, 553 Yuan, 257 Yuan and 502 Yuan respectively.
The company’s ton-steel profitability ratio is relatively stable, and the transient average industry performance is mainly due to the following reasons: First, the comprehensive product structure, the company’s wide and thick plates, long products, cold and hot coils are relatively evenly distributed, and the other steel pipe accounts for about 8%.Downstream, of which the construction machinery and oil and gas downstream industries have performed better this year, which can hedge the downturn in the automotive industry; the second is that the product has a certain technical content, such as the widest plate sales of the industry in 2018, the gross profit per ton of steel is only lower than the firstAn 88 yuan, auto sheet is one of the few companies in the country that can produce ultra-high-strength steel. The representative product Usibor1500 is currently the highest strength auto sheet in China. The irreplaceability brought about by technical barriers will enhance its ability to resist the cycle.It is the company’s insistence on lean production, tapping potentials and increasing efficiency to increase its own safety margin; market-oriented debt-to-equity swap + overall listing of steel assets: According to the latest announcement, the company intends to use 4.
The price of 58 yuan / share was issued to 9 counterparties, including Hualing Group, Liangang Group, Henggang Group, CCB Finance, BOC Finance, Hunan Huahong, China Huarong, ABC Finance, Zhaoping Suida, etc. 19.
07 billion shares purchased Hualing Xianggang 13 which it holds in total.
68% equity, Valin Liangang 44.
17% equity, Valin Steel Pipe 43.
42% equity, and the company plans to use cash17.
310,000 yuan to purchase 100% equity of Hualing Energy Conservation held by Liangang Group.
After the completion of the transaction, the net profit of the shareholders affiliated with the listed company will further increase, replacing the financial burden of the listed company and optimizing the capital structure, promoting the synergy between steel production and energy-saving power generation, and reducing related party transactions; investmentSuggestion: As a leading steel company in Central and South China, the profitability of the company follows the industry fundamentals.
In the case that the industry demand is not pessimistic, in the future, the company will gradually reduce the financial burden on the company and gradually increase the profit level attributable to shareholders of listed companies.
The company’s EPS for 2019-2021 is expected to be 1.
18 yuan, 1.
22 yuan, 1.29 yuan, maintaining the “overweight” rating; risk warning: high macroeconomic growth leads to demand pressure; supply-side pressure continues to increase.