TISCO Stainless (000825): Second-quarter performance improved significantly

Summary of results: Taigang Stainless announced its 2019 half-year forecast. The report is expected to achieve a net profit of US $ 1.1-1.2 billion attributable to shareholders of listed companies, compared with a profit of 28 in the same period last year.

3.6 billion, a year-on-year decrease of 57.

68% -61.

21%; Estimated return on budget 0.

19 yuan-0.

21 yuan, the same period last year was 0.

50 yuan; second-quarter performance low-level repair: According to the company’s latest performance forecast, it is estimated that the second quarter of the single quarter is expected to achieve net profit attributable to shareholders of listed companies.

55 ppm-8.

55 trillion, equivalent to EPS.

13 yuan-0.

15 yuan.

The company’s net profit attributable to the parent company in the last four quarters was 12 respectively.

2.5 billion, 9.

1.6 billion, 3.

4.5 billion and 8.

50,000 yuan (median). Although the profit in the second quarter of this year has dropped significantly compared with the same period last year, it has clearly repaired one third of the first quarter.

If the calculation is based on the company’s single-quarter steel output of 270, the company’s net profit per ton of steel in the second quarter was 298 yuan, an increase of 170 yuan from the second quarter.The other products are mainly hot-rolled coil, wheel steel and some pipe materials. Its product structure determines that the company’s profit is highly dependent on the fields of automobiles, home appliances, building decoration, engineering machinery, and petrochemicals.

Although the prosperity of the industrial plate industry has improved this year, the price of the company’s stainless steel plate has fallen only marginally. With the gradual weakening of the prices of raw materials such as chromium and nickel, its stainless steel profitability has steadily increased.

In addition, the company’s performance compared to the repair in the first quarter also benefited from the rebound in general material profit. We estimated that the average gross profit per ton of 深圳桑拿网 hot rolled steel in the second quarter of 2019 was 364 yuan, an increase of 27 yuan from the first quarter, considering the raw materials.In the stocking cycle, the real cost increased to more lags, and the actual improvement was reduced; the industry’s profitability may improve in the second half of the year: although the company’s performance has improved significantly from the previous quarter, the decline is still significant, and the profitability of general materials has dropped significantly.Is the primary cause of its performance decline.

The demand performance of the steel industry in the first half of this year is still strong, but the increase in production capacity brought about by the relaxation of environmental protection and production restrictions has led to a decline in the industry’s prosperity and the profit of steel companies has shrunk.

Looking forward to the second half of the year, due to overlapping land expansion and infrastructure expansion, it is expected that the intensity of steel demand will continue.

After the supply side has fully extended in the first half of the year, the marginal relaxation space is limited again, and there is a possibility of tightening. There is room for repair of steel profits in the subsequent stage after the supply and demand connection, and the company’s performance improvement momentum promotes sustainable continuity.As a leading stainless steel company, 300 series and 400 series stainless steel coils are in a leading position in China.

Under the steady demand, there is limited room for the release of industrial supply in the later period and there is a possibility of tightening. The profit of the steel industry can be recovered in the second half of the year, which will continue to improve the company’s performance.

Its 2019-2021 EPS is expected to be 0.

46 yuan, 0.

55 yuan and 0.

64 yuan, maintain the “overweight” rating; risk warning: macroeconomic growth trends cause demand pressure; supply-side pressure continues to increase.