Valin Steel (000932) Quarterly Comment: Net profit in the third quarter dropped by 12 quarter-on-quarter.

67%

Valin Steel (000932) Quarterly Comment: Net profit in the third quarter dropped by 12 quarter-on-quarter.

67%

Third quarter performance overview.

On January 9, 2019, the company’s operating income was 819.

82 ppm, an increase of ten years6.

09%; operating profit was 59.

0.94 million yuan, down 27 every year.

63%; net profit attributable to owners of the parent company is 33.

0.94 million yuan, down 42.

37%, corresponding EPS is 0.

80 yuan.

By quarter, the net profit attributable to owners of the parent company in the third quarter was 10.

00 ppm, a year-on-year decrease of 54.

37% / 12.

67%.

Increasing sales volume has helped increase annual revenue.

In the first three quarters of 2019, the company’s iron, steel, and material output were 1317/1618/1521 spindles, respectively, which increased by 9 times.

7% / 11.

2% / 11.

4%; sales of steel products are 1541 attachments, an increase of 11.
.

9%.

From the perspective of product purity, the company’s 2019Q1-Q3 average price of the product is roughly 4929 yuan / ton, which is a decrease of 0.

90%.

It can be seen that the company’s annual increase in revenue is mainly due to the increase in product sales.

The gross profit per ton of steel in the third quarter fell month-on-month, but was better than the first quarter.

In 2019, environmental protection and production restrictions were relatively relaxed, and output continued to increase, while iron ore prices increased more strongly than steel prices, and profit per ton of steel continued to fall.

The company’s comprehensive gross profit margin for the first three quarters of 2019 was 13.

3%, ten years ago 4.

Five single, visible decline in product profitability is the company’s previous improvement in net profit leading.

According to our forecast, the gross profit per ton of steel products of the company in Q1 to Q3 2019 will be 598/717/655 yuan / ton, which will decrease by 162/164/341 yuan / ton in each quarter, which is consistent with the industry trend.

From the quarter-on-quarter comparison, the company’s profit per ton of steel in the third quarter was weaker than that in the second quarter, but better than that in the first quarter.

Promote the overall listing of the main steel industry.

After the company announced the issuance of shares and paid cash to acquire the equity of “Sangang” (Hualing Xianggang, Valin Henggang, Valin Liangang), the company’s holding subsidiary Hualing Xianggang acquired 51% of Yangchun New Steel in cash.Equity.

After the completion of the acquisition, the overall listing of the main assets of the iron and steel industry will be realized, the scale of the listing platform will be further increased, minority interests and related transactions will be reduced, and the company’s performance will be enhanced.

Investment Advice.

It is estimated that the operating income for 2019-2021 will be 1023.

80/1054.
87/1083.
8.7 billion, an increase of 12 each year.

3% / 3.

0% / 2.

7%; net profit attributable to shareholders of listed companies is 43.

57/48.

86/53.

20 ppm with a budget benefit of 1.

03/1.

16/1.

26 yuan, corresponding to PE 4.

0/3.

5/3.

3 times.

At present, the profit per ton of steel in the industry is still in the bottom line area. Steel prices and raw materials are being bundled down. The profit change per ton of steel must also be certain, and there is an expectation of bottoming out. There is a periodical estimate of repairs for ordinary steel.

The company is a regional leader in sheet metal. The overall listing of the main steel industry within the group has further enhanced the platform’s output and performance scale, and has achieved outstanding performance and underestimated characteristics. We maintain an investment rating of “overweight”.

北京夜网 Risk Warning: Stall at the supply side increases risk; demand exceeds the expected risk.