Main points of the report
Event description
Anyang Iron and Steel released the 2018 semi-annual report, during the reporting period, operating income reached 15.768 billion yuan, an increase of 36.80% over the same period last year; operating cost was 13.678 billion yuan, up 31.09% over the same period last year; and net profit attributed to shareholders of listed companies was 1.017 billion yuan, an increase of 3562.57% over the same period last year, corresponding to EPS of 0.425 yuan.
Among them, the company's operating income in the second quarter was 9.509 billion yuan, up 57.50% from the same period last year. 14.03% in the first quarter compared with the same period last year; operating cost was 8.06 billion yuan, up 52.32% in the first quarter; 9.25% in the first quarter compared with the same period last year; the net profit of shareholders belonging to the parent company in the second quarter was 888 million yuan, an increase of 589.45% over the previous quarter. According to the latest equity, the company's EPS in the second quarter was 0.371 yuan, and EPS in the first quarter was 0.054 yuan.
Event comment
Both volume and price rose, and the performance in the second quarter was higher than that in the previous quarter: the company's profit in the second quarter was the second highest in history. The company's main products are plates, and medium and thick plates account for a relatively high proportion. The substantial increase in performance in the second quarter is mainly due to the double increase in production and profits per ton of steel. On the one hand, with the end of the production limit of environmental protection in the heating season, the company's steel production and sales rebounded sharply in the second quarter, and the company's steel production and sales increased by about 42% and 47% respectively in the second quarter, which became the main reason for the improvement in performance. On the other hand, plate prices rose 1.57% month-on-month in the second quarter due to the manufacturing boom, of which medium and thick plates rose by 6.29%. The company's average prices of profiles, strip and other materials changed by-0.38%, 4.38% and 7.78% in the second quarter. At the same time, raw material prices were weaker than the previous month, of which the average mineral price fell 12.46%, the average price of coke dropped 3.10%, and the average price of scrap fell 3.04%, resulting in an overall increase in profit in the second quarter compared with the previous quarter. The company's gross profit per ton of steel and net profit per ton of steel increased by 231 yuan and 303 yuan respectively in the second quarter.
Production and marketing running-in superimposed power investment in environmental protection, the company is expected to be reborn: the company's profitability was relatively weak in the past, mainly due to the rapid expansion of production capacity against the trend, limited product structure and continuous production restrictions of environmental protection. However, the situation has changed. On the one hand, the medium and heavy plate is booming due to the exuberant production and sales of downstream construction machinery, and the cold rolling production and certification have been gradually improved, which makes the company's variety and structure disadvantages can be made up or even turned into advantages. On the other hand, the company increases investment in environmental protection, and the current environmental protection level of the company is in the forefront of the industry, which is expected to reduce the probability of subsequent production restrictions; at the same time, the restart of the company's 1 million-ton electric arc furnace at the end of the year will also effectively hedge the impact of production restrictions on the company's output.
It is estimated that the company's EPS in 2018 and 2019 will be 1.07 yuan and 1.24 yuan respectively, maintaining a "buy" rating.
Risk Tips:
1. Environmental protection production restriction obviously affects normal production.
two。 The intensity of demand release is suppressed at the macro level.