Sangang Minguang (002110): Profits hit record high and dividends are high

Sangang Minguang (002110): Profits hit record high and dividends are high

Investment Highlights: The company released its 2018 annual report: Integrating the company to achieve operating income of 362.

48 ppm, an increase of 14 in ten years.

40%; net profit attributable to mother is 65.

07 million yuan, an increase of 20 in ten years.

04% (Sanan Iron & Steel has exceeded the scope of consolidation and its performance has been retrospectively adjusted), which is about EPS3.

98 yuan, the performance is in line with our expectations, of which in the fourth quarter of 2018 achieved 94 operating income.

23 ppm, an increase of 0 in ten years.

49%, net profit attributable to mothers13.

28 ppm, a decrease of 38 per year.

97%, down 31.


New initial profit.

Due to the consolidation of Sanan Iron and Steel, the company’s output of a series of steel products reached 959 inches, an increase of 52% before 2017.

According to the data forecast of the China Iron and Steel Association, the output of 233 endpoints in the fourth quarter of 2018 was basically flat compared with the previous third quarter.

The gross profit and net profit of the highest ton of steel were 1083 and 678 yuan, respectively, an increase of 155 and 46 yuan from last year.

Costs rose to profit margins in the fourth quarter.

Benefiting from a good supply and demand pattern, the average price of Q4 long products in Fujian is different from the overall situation in the country. Instead, it has risen from the previous month, benefiting from the company’s Q4 steel revenue of 4044 yuan per ton of steel, an increase of 132 yuan, but due to the cost of iron oreThe company’s Q4 net profit per ton of steel was 570 yuan, a month-on-month decrease of 255 yuan.

In addition, the company adjusted its accounting method to adjust the R & D expenses in the “operating costs” to the “R & D expenses” item in the income statement.

Efficient production, continued cost reduction throughout the process.

The company’s production efficiency has improved significantly, and the long-term iron-steel ratio is zero.

86, a decline of 0 every year.


Initial self-generation ratio 63.

73%, an increase of 7 a year.


The company continued to promote the whole process to reduce costs. Sanming headquarters and Quanzhou Minguang achieved cost reductions of the same caliber.

29 yuan / ton, 33.

84 yuan / ton, total cost reduction and efficiency increase2.

1.6 billion.

Implement a large proportion of dividends.

The company plans to distribute a cash dividend of 20 to all shareholders for every 10 shares.

00 yuan (including tax), a total of 32 dividends.

6.9 billion yuan, corresponding to a dividend rate of 50.

24%, dividend yield is about 12.


Focusing on the coastal areas, the future crude steel production capacity will reach 1,300 tons, and the core size will be enhanced.

The company plans to acquire Luoyuan Minguang, the Group’s high-quality assets. The acquisition will reduce competition in the industry and promote the orderly replacement of the company’佛山桑拿网s production capacity.

In addition, the company plans to invest in the steel production capacity index, cash and other assets owned by Shanxi Iron and Steel Group Laiwu Iron and Steel Xinjiang Co., Ltd. and Fujian Yixin, the asset performance index, all the land and the parties to jointly confirm the available public and auxiliary facilities, cash, etc.Assets, jointly set up a joint venture, and build a new production base along the coast of Luoyuan, in which the company holds 51% of the joint venture.There is no completed injection of San’an Iron and Steel, the proposed acquisition of Luoyuan Minguang, or the new production base planned by the joint venture company. Only the steel demand is more robust. At the same time, the overall overall distance to the port is relatively short, and its logistics costs have advantagesWe estimate that the production cost per ton of steel will be 150-200 yuan lower than that of Sanming Headquarters after the bases of Luoyuan Minguang and the joint venture have reached capacity.

By that time, the crude steel production capacity of the listed company Sangang Minguang will reach 1300 inches, which will further enhance the company’s competition and profitability in the Fujian market.

Revise down earnings forecast and maintain “Buy” rating.

We do not consider the impact of the company’s acquisition of Luoyuan Minguang for the time being, and considering the overall trend of the current industry profit, we lower the net profit attributable to mothers to 40 in 2019-2020.


750,000 yuan, (was 52.


3.6 billion), plus 2021 attributable net profit forecast37.

880,000 yuan, corresponding to PE 6.



1 times.

We remain bullish on the company’s long-term development and maintain a “Buy” rating!