The net profit of 20Q2 is 78 million yuan, which is obviously better than that of the previous month.
On August 9, the company released the mid-year report of 20 years, 20H1 revenue 1.16 billion yuan (YoY+1.4%), return to the mother net profit 130 million yuan (YoY-10.6%); 20Q2 revenue 700 million yuan (YoY+29.7%, QoQ+53.1%), return home net profit 80 million yuan (YoY+11.6%, QoQ+37.9%). Due to the impact of the epidemic, 20Q1's revenue and return net profit have declined, 20Q2 has improved, company revenue and return net profit have significantly improved. As we have considered the impact of the epidemic in the early stage, and we continue to be optimistic about the development of the company and keep the profit forecast unchanged, the EPS for 20-22 is 0.76 less 0.91 gray 1.00 yuan, still maintaining the "buy" rating.
The production and marketing scale of 20Q2 has obviously recovered.
The impact of the 20Q2 epidemic was basically eliminated, and the company's production and sales scale rebounded significantly compared with the previous month. The company's seamless pipe production and sales volume were 1.19 and 11900 tons respectively (YoY-4%, + 21% QoQQ 104%, + 62%), and welded pipe production and sales were 0.89% and 9200 tons, respectively (YoY+12%, + 55% QoQQ 62%, + 91%). Product price fluctuation is small, including seamless pipe 39,000 yuan / ton (YoY+7%,QoQ-8%), welded pipe 23,000 yuan / ton (YoY-3%,QoQ-3%). In addition, the company is still under construction project "6000 tons of stainless steel welded pipe for oil and gas transportation". Due to the impact of the epidemic in March of 20 years, the company's estimated completion time has been extended from June of 20 years to December, and this time there has been no change.
The net profit rate of 20Q2 sales reached 11.1%, which was relatively stable.
20Q2, the company's gross sales margin of 22.1% (YoY-2.3pct,QoQ+1.1pct), year-on-year decline, month-on-month increase; net sales margin of 11.1% (YoY-1.8pct), slightly lower than the same period last year, the performance is relatively stable. In terms of expenses, 20H1 sales, management, finance and R & D expenses changed by-10%, + 11%,-26% and-31% respectively over the same period last year, with an expense rate of 7.2% (YoY-0.7pct). The year-on-year changes in sales and management expenses are relatively small; interest expenses in financial expenses increase, but 20H1 exchange gains and losses turn negative year-on-year, and comprehensive financial expenses decline more year-on-year; R & D expenses decline more year-on-year, mainly due to amortization of equity incentive expenses and reduction of direct input expenses.
Low oil prices may bring certain pressure on capital expenditure in the oil and gas industry chain. On July 23, Petrochina and other companies announced that they intend to sell their oil and gas pipelines, part of gas storage tanks, LNG receiving terminals and other related assets to the State Pipe Network Group. The oil and gas industry chain has entered a substantive stage in the formation of a "Xero1x" pattern, which is expected to speed up the process of investment and construction of natural gas pipelines and LNG receiving terminals. However, under the impact of the epidemic, oil prices remain low, which may put pressure on the capital expenditure of the oil and gas industry chain represented by three barrels of oil.
Continue to be optimistic about the company's development and maintain its "buy" rating
The operating data and performance of 20Q2 Company show that the impact of the epidemic on the company has been basically eliminated, and the company's long-term trend may remain unchanged. Keep the previous profit forecast unchanged, the EPS for 20-22 is 0.760.91 pound 1.00 yuan. DCF estimates that the WACC is 9.32% (the previous value is 10.13%) and the intrinsic value per share is 11.72 yuan; the average PE (2020E) of the comparable company is 13.75 times, and the PE (2020E) of the company is 14 times, corresponding to the target price of 10.66 yuan. Comprehensively consider giving the company a target price of 11.72 yuan (9.14 to 10.89 yuan before the target price is estimated according to the capital stock after the increase), and maintain the "buy" rating.
Risk hint: the construction progress of the new project is not as expected; the development of the epidemic exceeds expectations.
