20Q2 net profit, deducting non-return net profit compared with the same period last year + 496% Universe 63% Company 20H1 realized revenue, return net profit, deducted non-return net profit 21,3.6, 120 million yuan (yoy-13%/+275%/+71%), 20Q2 realized revenue, return net profit, deducted non-return net profit 14,3.1,80 million yuan (yoy+1%/+496%/+63%,qoq+92%/+630%/+116%).
The increase in return net profit is mainly due to the completion of Huzhou Jinzhou asset collection and the confirmation of asset disposal income (after tax) of 230 million yuan; the non-return net profit growth is mainly due to the decrease in cost. The company expects to achieve a net profit of 4.2-500 million yuan in the first three quarters, which is 210% of the same period last year. The company has significantly reduced its cost, and we have raised our profit forecast. It is estimated that in 20-22, the EPS will be 1.000.62 yuan (0.61 yuan, the previous value is 0.89), maintaining the "overweight" rating.
The cost per ton of steel in 20H1 has decreased significantly.
20H1 achieved pipeline sales of 410000 tons,-9% compared with the same period last year, mainly due to the decline in product sales due to the epidemic, but the company's steel and plastic pipes have newly developed a number of new customers, such as Beijing Water Control and China Water Group, both of which are collected, and their sales are guaranteed to a certain extent. In the same period, the price, cost and gross profit per ton of steel are 5121, 4260 and 861 yuan per ton, respectively, which are-4.2%,-6.8% and + 11.3% respectively compared with the same period last year. This may be caused by the decrease in the price of hot-rolled steel strip (20H1-5.6% compared with the same period last year) and the reduction of material consumption in the company. 20H1's gross profit margin is 16.8% (yoy+2.3pct), of which galvanized pipe, spirally welded pipe and steel-plastic pipe gross profit margin is 14.9%, 17.5%, 27.0%, year-on-year + 2.6/+2.6/+3.9pct.
The 20H1 expense rate has declined significantly, and the cash flow has improved significantly.
20H1 company period expense rate, deduction non-return net interest rate 8.9%, 5.7% (yoy-0.2/+2.8pct), of which sales expense rate 3.3% (yoy+0.2pct), mainly due to the weakening of the impact of the Q2 epidemic, the company increased sales and market expansion, resulting in Q2 sales expenses of + 43% and + 190%, respectively. The sales, management, R & D and financial expenses of 20H1 were-6.6%,-17.6%,-11.8% and-63.0% respectively compared with the same period last year.
The net operating cash flow of 20H1 is 150 million yuan (yoy+459%), and the cash paid for purchasing goods and receiving services is-200 million yuan compared with the same period last year. Cash from 20H1 sales accounts for 105% of revenue.
Pipe network group accelerated construction, infrastructure investment strengthened, steel pipe demand or upgrade according to the announcement of Petrochina Company Limited and China Petroleum & Chemical Corp on March 23 of Wind,7, they plan to sell a total of 391.4 billion yuan of oil and gas pipelines and other assets to the State Pipe Network Group, and hold a total stake of 43.9% after the completion of the investment. We believe that the assets of the National Pipe Network Group are gradually in place, which is expected to promote the construction of oil and gas pipe networks, or boost the demand for steel pipes. In addition, infrastructure investment (excluding electricity) in July is + 7.9% year-on-year, compared with June + 1.1pct, infrastructure investment is expected to be stronger, stack the old reform to continue to generate capacity, and pipeline demand may further increase. According to the Ministry of Housing and Construction, by the end of June, 15900 new residential areas had been built nationwide, accounting for 40 percent of the annual target tasks, compared with May + 21pct.
Earnings are expected to continue to improve and maintain "overweight" ratings
We believe that the company's profit is expected to continue to improve, and the downstream demand is good, so the profit forecast is revised upwards. It is estimated that the company's BVPS for 20-21 years is 5.39pm 5.66xt 6.10 yuan (the previous value is 5.28xb 5.50pinch 5.93 yuan), which corresponds to 1.25x of PB 1.41max and 1.23x of the company's average PB (2020E Wind consensus), because the market openness of long-distance pipelines is higher than that of other sectors. Give the company 1.55 times PB in 2020, with a target price of 8.35 yuan (the previous value is 6.33-6.86), and maintain the "overweight" rating.
Risk hint: corporate downside is unsustainable; macroeconomic downside is higher than expected; downstream demand is lower than expected.