Nangang Iron & Steel Co., Ltd. (600282): The short-term downturn in the steel industry may weigh on the company’s performance
The net profit attributable to shareholders of the parent company reached US $ 4 billion, a year-on-year growth rate of 25%. On March 22, 2019, the company released its 2018 annual report: the company achieved revenue of US $ 43.6 billion, exceeding the growth rate of 16.
08%, net profit attributable to shareholders of the parent company 40.
08 million yuan, a growth rate of 25 in ten years.
24%, basic profit returns 0.
91 yuan, a year-on-year growth rate of 15.
56%, the performance is slightly lower than our previous expectations, or due to the 2018Q4 plate prices fell.
The company’s main downstream is construction, energy and ships. We expect the steel supply and demand relationship to deteriorate in 2019, and steel prices may fall.
The capital expenditure of the four major minerals has contracted, the inflection point of iron ore supply has reached, and the difficulty of intensifying the VALE mine in the early stage has increased. Coke is facing pressure from supply-side reforms, so raw material costs are expected to rise.
The company’s EPS for 2019, 2020 and 2021 is expected to be 0.
58 yuan, 0.
60 yuan, 0.
63 yuan, maintaining the “overweight” level.
The company’s dividend payout ratio is 33%, which is an increase of 26 units from 2017. In 2018, the company intends to distribute a cash dividend of RMB 3 (including tax) to all shareholders of the company for every 10 shares.
With a total share capital of 44 on March 22, 2019.
Based on 2.2 billion shares, the total profit distribution is RMB13.
2.7 billion, accounting for 33% of the net profit attributable to shareholders of the parent company in 2018, exceeding the dividend ratio of 7% in 2017.
At the closing price of March 22, 20194.
At 35 yuan / share, the company’s dividend is reset 6.
On December 19, 2018, the company released the “Shareholder Return Plan for the Next Three Years (2018-2020)”, which clarified that the cash dividend restructuring to be distributed in each year from 2018 to 2020 should be 南宁桑拿 no less than that attributable to shareholders of listed companies in that year.30% of net profit is conducive to stabilizing the market’s dividend expectations.
In 2018, the company’s steel sales volume was 919, and the production-sales ratio exceeded 100%. Annual company pig iron, crude steel, and steel output were about 909, 1005, and 917, respectively, and the growth rates were -1.
43%; steel sales growth rate of 919, an annual growth rate of 5.
19%, steel production and sales 100 per second.
In 2018, the proportion of premium and special steel products in plate and long products exceeded 90% and 60%. The average molecular weight (excluding tax) of the company’s products was 4,087 yuan / ton, and the cumulative increase was 551 yuan / ton.
Based on technological innovation, intelligent manufacturing, dual-main business or breakthrough cycles, the company has newly added 101 authorized patents.
The company actively deploys “smart manufacturing”, relies on the “JIT + C2M” model, and customizes according to customer needs. It is committed to the development of high-end products such as deep-sea engineering, nuclear power engineering, and LNG storage tanks.
The iron and steel industry is gradually strengthening. The company restructures the dual-main business structure in which steel and new materials, environmental protection, “Internet +” and other related diversified businesses are simultaneously developed. The “dual-main business” may support the company’s performance breakthrough cycle.
The performance in 2019 may be under pressure, maintaining the company’s “overweight” rating. We expect the steel supply and demand relationship to deteriorate or the steel price to decline.
The capital expenditure of iron ore contracted, the inflection point of supply has reached, and the difficulty of VALE mine intensified in the early stage. The coke side is under pressure from supply-side reforms, and the cost of raw materials is expected to rise.
The company’s EPS for 2019-2021 is expected to be 0.
63 yuan, corresponding to PE 7.
26, 6.91; the previous forecast of EPS in 2019 and 2020 is 0.
86 yuan, the corresponding PE is 4.
Comparable company PB (2019) is expected to be 1.
22, the current company PB (LF) is 1.
25. Give the company 1 in 2019.
A 20-fold PB estimate predicts a BPS of 4 in 2019.
06 yuan, corresponding to the target price of 4.
87 yuan, maintaining the “overweight” level.
Risk reminder: the company ‘s diversified distribution performance growth in the short term is lower than expected;