This report is read as follows:
The company's 2019Q3 production and sales maintain a high level, during the cost optimization, rising costs lead to performance pressure. October macro data show that real estate resilience is strong, infrastructure is expected to pick up. Under the background of high mineral prices falling, the company's performance is expected to pick up.
Main points of investment:
Maintain the "overweight" rating. The company achieved revenue of 16.113 billion yuan in the first three quarters of 2019, up 1.96% from the same period last year; the company's net profit was 422 million yuan, down 66.95% from the same period last year; the company's Q3 revenue was 5.478 billion yuan in a single quarter, and the company's net profit in the first three quarters was 0.69,3.11 and 42 million yuan, respectively. The company's Q3 performance is under pressure. Taking into account the rising pressure of iron ore prices at the cost side, the overlay industry supply exceeded expectations, downgrading the company's EPS from 2019-2021 to 0.18max 0.15max 0.16 yuan (formerly 0.21pm 0.26qx 0.31 yuan), the company's management capacity continued to improve, giving the company 2019 a certain premium PB 1.12X for valuation, downgrading the company's target price to 3.12yuan (formerly 3.72yuan), "overweight" rating.
Gross margin per ton of steel fell, with results falling in the third quarter. In the first three quarters of 2019, the company's steel sales volume was 147,149,149,1.53 million tons respectively, and the price per ton steel was 3515 yuan, 3670 yuan and 3575 yuan per ton respectively. The gross profit per ton steel was 219,412,177yuan per ton respectively, the three fees per ton steel were 166,166,128 yuan per ton respectively, and the net profit per ton steel was 47,210,27 yuan per ton respectively.
The asset-liability ratio maintained a downward trend, and expenses continued to be optimized during the period. At the end of the third quarter of 2019, the company's asset-liability ratio was 47.78%, down 5.67 percentage points from the whole of 2018. The company's expense rate for the first three quarters of 2019 was 2.85%, down 0.72% from the whole of 2018, of which the financial expense rate was 0.34%, down 0.39% from the whole of 2018.
The decline in mineral prices superimposes the improvement of the company's management ability, and the company's performance is expected to pick up gradually. Macro data show that the toughness of real estate is still there, the infrastructure is gradually warming up, the recent steel inventory is obvious, and the demand for building materials in the fourth quarter is expected to be stronger than in previous years. As the largest rod and wire production base in Northeast China, the company will directly benefit from the strong demand for building materials, superimposing its management ability to improve cost reduction and efficiency, and the company's performance is expected to pick up gradually.
Risk hint: macroeconomic decline accelerated; supply-side rise exceeded expectations.
