Main points of the report
Event description
Anyang Iron and Steel released its results for the third quarter of 2018, with a net profit of 1.573 billion yuan for shareholders of listed companies in the first three quarters, an increase of 61.03% over the same period last year.
The company realized net profit of 556 million yuan for shareholders of listed companies in the third quarter, down 41.41% from the same period last year and 37.39% month-on-month. According to the latest equity, the company's EPS in the third quarter was 0.23 yuan, and EPS in the second quarter was 0.37 yuan.
Event comment
The strong raw materials led to a decline in gross profit margin and a month-on-quarter decline in performance in the third quarter: the company's product structure is mainly plate. In 2017, the company's plate revenue accounted for 62.91%, building materials and profile revenue accounted for 18.61% and 3.83% respectively. In the third quarter, due to the rise in operating costs and the weakening of plate profits from the previous month, the company's gross profit margin fell 3.57 percentage points month-on-month to 11.67%, and performance dropped 37.39% from the previous month.
The increase in raw material prices in the third quarter was higher than that in steel prices, eroding some of the profits in the steel sector, among which plate profits declined significantly compared with the previous month. On the one hand, on the steel price side, the average price index of Mysteel long steel and plate rose 7.52% and 2.97% respectively in the third quarter. As a comparison, the average price of iron ore, scrap and secondary metallurgical coke at the raw material end increased by 5.29%, 8.90% and 17.92% respectively. As a result, the cost of rebar, wire rod, hot rolling, cold rolling and medium and heavy plate lagged by one month and estimated that the average gross profit increased by about 125,140 yuan respectively. Fell by about 85 yuan, 19 yuan, 190 yuan. On the other hand, in the case of the decline in plate profits, due to the relatively high proportion of plate sales, the company's profits were relatively affected: in the third quarter, the company sold 1.7027 million tons of plate and strip and 124400 tons of profiles, although the total sales increased slightly compared with the previous month. But plate occupies an absolute share. Finally, the company's net profit per ton of steel fell by about 142 yuan / ton to about 232 yuan / ton in the third quarter.
Production and marketing running-in superimposed power investment in environmental protection, the company's future development is expected: the company's profitability in the past is relatively weak, 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 gradually changed. With the gradual improvement of the company's cold rolling production and certification, the inferior situation of the company's variety structure began to reverse. In addition, the company increases investment in environmental protection, the current environmental protection level of the company has been in the forefront of the industry, is expected to reduce the probability of subsequent production restrictions, the future development of the company is worth looking forward to.
It is estimated that the company's EPS in 2018 and 2019 will be 0.92 yuan and 0.97 yuan respectively, maintaining a "buy" rating.
Risk tips: 1. There is a possibility of a substantial upward trend on the supply side.
two。 The demand for sheet metal has dropped considerably.