This report is read as follows:
The company's performance in the first quarter of 2020 was slightly lower than expected. Affected by the epidemic, the company's product production and sales decreased compared with the same period last year, but prices continued to rise. The company's new production capacity is progressing smoothly and is expected to bring production increments to the company after the end of the epidemic.
Main points of investment:
Maintain the "overweight" rating. In the first quarter of 2020, the company achieved operating income of 460 million yuan, down 24.06% from the same period last year; the net profit returned to the home was 57 million yuan, down 29.79% from the same period last year, and the company's performance was slightly lower than expected. In view of the great impact of the epidemic on the company's production and sales, the company's EPS from 2020 to 2022 is estimated to be 0.98 RMB 1.06 shock 1.08 yuan (the original 1.15pm 1.18 shock 1.21 yuan). In view of the high dividend rate of the company, the target price is maintained at 13.8 yuan and the "overweight" rating is maintained.
The price of steel pipe products continued to rise, and the epidemic depressed the company's production and sales. In the first quarter of 2020, the production and sales of steel pipe products of the company were 1.13 and 12100 tons respectively, down 0.45 and 4400 tons respectively compared with the same period last year. In the first quarter, the price of steel pipe per ton of the company was 37900 yuan / ton, which was 559 yuan / ton higher than that of 2019Q4. The price of the company's products maintained an increasing trend. In the first quarter, the gross profit and net profit of the company's tons of products were 7971 yuan and 4658 yuan per ton respectively, up 111yuan / ton and down 208yuan / ton respectively compared with 2019Q1. We expect the company's production and sales to rebound in the 2nd-4th quarter, superimposing the company's breakthroughs in the high-end field, and the company's performance will improve steadily.
The gross profit margin of products remains high and the asset-liability ratio goes down. The company's gross profit margin on 2020Q1 sales was 21.02%, down 0.44% from 2019Q1. We expect that with the development of the company's high-end products, the company's gross profit margin will return to the upward trend. At the end of the first quarter, the company's asset-liability ratio was 22.54%, down 1.65 percentage points from the end of 2019, and the company's asset-liability ratio remained low.
With the continuous expansion of high-end products, output will continue to rise. The company continues to expand in high-end areas and made a breakthrough in 2019. Combined with the company's strategy, we believe that the company will continue to cultivate the field of high-end pipes, and the products will continue to upgrade. While the company's welded pipe project continues to advance, the company's output still has room to increase.
Risk hint: the sharp fall in crude oil prices led to a decline in downstream capital spending.
