2019, 20Q1 homing net profit is + 44% and + 1% respectively compared with the same period last year.
In 2019, the company realized revenue of 5.05 billion yuan (yoy+5.0%), net profit of 280 million yuan (yoy+44.2%) and non-return net profit of 220 million yuan (yoy+64.0%), which was consistent with the performance of KuaiBao; 20Q1 realized operating income of 720 million yuan (yoy-31.4%, qoq-49.1%) and net profit of 40 million yuan (yoy+1.1%, qoq-62.5%), mainly due to the decrease of expenses and thickening profit compared with the same period last year. The company estimates that 20H1 will achieve a return net profit of 3.1-360 million yuan, and 20Q2 will generate 220 million net income on disposal. After deducting 220 million, the performance of H1 and Q2 will be 0.9-1.4 (yoy-0.7%~+49.3%) and 0.5-100 million (yoy-2.2%~+88.1%) respectively. We adjust our profit forecast and estimate that the EPS for 20-22 will be 0.890.53 plus 0.61 yuan respectively (0.53 0.68 before 20-21), maintaining the "overweight" rating.
In 2019, the quantity and price of welded pipe rose, and the 20Q1 cost decreased and thickened compared with the same period last year. In 2019, the company's production and sales of welded pipe were 94 and 960000 tons respectively (yoy+0%, + 5%). The selling price and gross profit per ton of welded pipe were 5063 yuan and 580 yuan per ton (yoy+ 21, + yuan / ton). The gross profit margin and net profit margin were 15.7% and 5.8%, respectively. 20Q1, the rate of expenses and expenses during the company period is 53 million yuan and 7.4% respectively, which is-38 million yuan and-1.3pct respectively compared with the same period last year. This is mainly due to the decrease in sales and transportation fees due to the epidemic. The company expects 20H1 to achieve a net profit of 3.1-360 million yuan, and its subsidiary, Huzhou Jinzhou, will generate 220 million net income from disposal in Q2.
Actively lay out the peripheral market, and the market is gradually spread out.
In 2019, the company accelerated the layout of the national market, the steel and plastic pipe sales department increased its development efforts in the weak markets of northwest, southwest and central China, and newly developed Lanzhou Water Group, Guizhou Duyun Water Company, Pingtang Water Company and so on. In 2019, there were more than 60 new customers in Guizhou, Guangxi, Gansu and other peripheral markets.
Oil and gas pipe network investment is expected to increase, old reform or power, is expected to boost welded pipe demand according to Petrochina Company Limited, China Petroleum & Chemical Corp, CNOOC annual report, 2020 "three barrels of oil" capital expenditure plan of 528.4 billion yuan, year-on-year + 1.1%, or drive the growth of oil and gas pipe network investment. According to the China Economic Times, on April 5, the State Pipe Network Company included the first batch of "three barrels of oil" assets, including 15 of the 19 companies.
We believe that with the establishment of the pipe network company and the improvement of the opening level of pipeline construction to the outside world, the company is expected to obtain more orders. In terms of urban and rural pipelines, we expect that the infrastructure projects that should have been launched in 20Q1 are expected to start in Q2, and there may be a high growth rate of infrastructure investment in the later stage, or lead to the growth of urban and rural pipeline demand. On April 14, the National standing Committee decided to step up the old reform, calling for the transformation of 39000 old urban neighborhoods this year, involving nearly 7 million households, double that of last year, and is expected to invigorate the replacement market of urban and rural pipelines.
It is expected to benefit from the growth of pipe network investment and maintain the "overweight" rating.
In 2019, the company paid out 3 yuan for 10 years, with a dividend rate of 57%. The dividend yield was 5.2% based on the stock price on April 24.
Taking into account the asset disposal income this year, and the pipeline demand is expected to improve, so raise the 2020 forecast In addition, considering that the pipe network company has just started to load assets and the overall operation rhythm has shifted backward, we estimate that the company's 20-21 BVPS 5.28pm 5.50 pound 5.93 yuan (20-21 years ago 5.03 pound 5.52 yuan) corresponds to PB 1.10pm 1.05pm 0.98 times, which is 1.10 times higher than the company's average PB (2020E consistent Wind expectations), because the market openness of long-distance pipelines is higher than that of other sectors. Give the company 1.20-1.30 times PB in 2020, with a target price of 6.33-6.86 yuan, and maintain the "overweight" rating.
Risk hints: the macroeconomic downside is higher than expected; the downstream demand is lower than expected; and the development of the epidemic is higher than expected.