Sinosteel International (000928) Annual Report Commentary: Results bottomed out and new signed contracts increased significantly
Matters: The company released its 2018 annual report and achieved operating income of 83 in 2018.
6.7 billion, an increase of 3 over the same period last year.
99%; realize net profit attributable to shareholders of listed companies.
4.1 billion, an increase of 2 over the same period last year.
01%, the increase in the next ten years after deducting 21.
Implement EPS 0.
35 yuan, it is planned to distribute cash for every 10 shares.
20 yuan (including tax).
Revenue and net profit growth bottomed out and reversed, and the scale and proportion of domestic business income increased significantly: The company achieved operating income and net profit growth attributable to shareholders of listed companies in 2018, respectively.
01%, the revenue growth rate has turned positive for the first time since 2014, and the growth rate of net profit attributable to mothers has changed from negative to positive earlier in 2017 and has increased significantly by 20.
Pioneer non-recurring gains and losses totaled 0.
5.3 billion, compared with 1 in 2017.
12 billion reduction 52.
68%, mainly due to changes in factors such as capital occupancy charges for non-financial corporate restructuring, debt restructuring gains and losses included in the current profit and loss.
Looking at the quarter, the company’s 2018Q1?
Q4 achieved revenue growth of -11 in two years.
95%, Q3, Q4 revenue growth from negative to positive and significantly accelerated; the net profit attributable to shareholders of listed companies increased by -9.
34%. The higher growth rate of net profit in the fourth quarter may be related to the concentrated carry-over of projects under construction.
From the perspective of business structure, the company’s main businesses respectively achieved revenue and growth (without considering segment inheritance): general engineering contracting74.
7.4 billion (+3 years ago).
39%), domestic and foreign trade 6.
7.9 billion (five years + 5).
41%), service income1.
920,000 yuan (ten years +25.
19%), accounting for 89% of total project contracting business revenue.
33%, still the company’s main source of income, while the revenue of service business grew faster.
From the perspective of market structure, domestic business achieved revenue of 51.
520,000 yuan (ten years +81.
85%), with revenue accounting for 61.
58% (+26 for one year.
37 pct); overseas business achieved revenue of 32.
150,000 yuan (-38 for the whole year).
33%), with an income share of 38.
42% (twice -26.
The report shows that the increase in the revenue of the first-tier company’s internal business has penetrated, and the Huoqiu 300-ton steel project in Anhui has initially recognized revenue9.
43 billion dollars.
The profitability has decreased, the proportion of domestic business gross profit contribution has increased, and asset impairment losses have decreased. In terms of gross profit margin, the report caused the company’s comprehensive gross profit margin to reach 11.
64%, down by 2017.
5 pct, the year that the gross margin level increased since 2014.
In terms of business, gross profit margins of general contracting, domestic and foreign trade, and service business were 11.
10% (twice -2.
66 pct), 10.
49% (decade +7.
41% (decade +4.
In the report period, the gross profit contribution of the company’s general contracting business accounted for 85.
23%, its lower gross profit margin lowered the company’s overall gross profit level.
By market, the gross profit margin of domestic business was 15.
07% (one year +1.
78 pct), gross profit contribution accounted for 79.
74% (decade +47.
76 pct); overseas business gross margin is 6.
13% (year -7.
34 pct), gross profit contribution accounts for 20.
26% (decade -47.
76 pct); the proportion of long-term company’s internal business gross profit contribution has greatly increased.
In terms of period expenses, in 2018, the company’s management expenses (plus R & D expenses), sales expenses and financial expense ratios were 6 respectively.
98% (decade -0.
22% (one year-0.
05 pct), -0.
21% (ten years +3.
74 pct), of which the increase in financial expenses was mainly due to the recognition of the debt restructuring index income of the heavy steel project and Huoqiu project owner in 2017, which resulted in the decrease in financial expenses for the year.
In the initial period, the company suffered asset impairment loss of -1.
670,000 yuan, a decrease of 1 from last year.
US $ 7.4 billion, mainly due to the prolonged write-back of bad debt losses.
In terms of net interest rate and return on net assets, the net profit of sales can be increased.
09%, a decrease of 0 from 2017.
34 pct, mainly due to the reduction in gross profit margin; ROE (deduction) is 9.
20%, the year before 2017 slightly decreased by 0.
Operating cash inflows increased, the level of interest-bearing debt increased, and there was ample surplus in monetary funds: In terms of cash flow and monetary funds, the reported net cash flow from operating activities of the combined company was 12.
31 ppm, with an inflow increase of 4 per year.
28 trillion, mainly due to the increase in new construction projects in 2018, and the increase in advance receipts; the net cash flow from investment activities was zero.
580,000 yuan, a cumulative increase of 3 in ten years.
32 trillion, mainly because some investment funds were recovered in 2018, and the use of raised funds was changed to supplement working capital; the net cash flow from financing activities was -2.
47 ppm, a reduction of 0 a year ago.
The balance of monetary funds is 30.
5.9 billion, an increase of 15 over the beginning of the period.
3 ppm, mainly due to increased operating and investment cash inflows.
In terms of capital structure, the company’s assets and liabilities were supplemented at the end of the period70.
59%, an increase of 5.
17 pct, but debt restructuring after excluding advances 62.
05%, which is basically the same as the end of 2017, reflecting that the increase in the company’s liabilities was mainly due to the increase in advances due to the increase in newly started projects.
According to our calculations, the company’s current interest-bearing debt (statistical short-term expenditure + long-term debt + settlement bonds + non-current debt due within one year) is 6.
$ 3.4 billion, with up to 4 interest-bearing debt / assets.
07%, the recognized interest rate denial rate helps the company to further expand its business scale.
In terms of accounts receivable, the company’s total accounts receivable and bills at the end of the period were 64.
30 trillion, a slight decrease of 0 a year.
Receivable turnover of preliminary accounts reorganized 1.
99, before 2017.
41 has an increase in contraction.
The growth rate of newly signed contracts has increased rapidly, and orders / revenues are relatively high. Actively expanding various businesses: According to the briefing on the operation of engineering business in the fourth quarter of 2018, the company gradually increased the cumulative amount of newly signed engineering contracts in 2018 by 261.
750,000 yuan, an increase of 166 in ten years.
47%, of which the total contract value of foreign projects is 69.
660,000 yuan, an increase of 33 in ten years.
19%; the total amount of national project contracts is 192.
08 million yuan, an increase of 318 in ten years.
As of the end of the reporting period, the company had implemented 211 unfinished projects, and the unfinished part had an expected income of 201.
06 ppm; 55 projects with contracts in force but not yet started, with a total contract value of 190.
2.4 billion; the above totals 391.
30 million, equivalent to 4 of the company’s operating income in 2018.
68 times, ample contract reserves, laying the necessary foundation for the company’s subsequent development.
In 2018, while continuing to consolidate its competitive advantage in the steel and metallurgical engineering industry, the company also actively expanded diversified business areas: 1) Shanxi Liheng Iron & Steel 30-pillar toluene and co-production LNG 杭州桑拿 project became the first steel and chemical cross-cutting project; 2) Inner Mongolia Jing’an 120-ton / year nickel-iron alloy project has achieved a breakthrough in the company’s general contracting technology in the field of ferroalloys; 3) Wuhan Qingshan Beihu Ecological Experimental Zone Phase I PPP project provides important water treatment and other municipal engineering business for the companyPotential; 4) The South African Platinum Mine Project is the first platinum EPC project of the company and a Chinese company in the South African mining field.
Investment companies Sinosteel Tiancheng and Sinosteel Shijiazhuangyuan also reported breakthroughs in their respective fields.
Investment suggestion: The company has obvious advantages in international operation. It is one of the Chinese companies that has initially gone 西安耍耍网 abroad in the field of metallurgical engineering and has an unquestionable reputation in overseas metallurgical engineering markets.
We are optimistic about the company’s brand advantages, technology in related fields, and contracting capacity barriers. It is predicted that the company’s revenue growth from 2019 to 2021 will be 14 respectively.
3%, the growth rate of net profit attributable to mothers was 18 respectively.
0%, the realized EPS is 0.
The first coverage gives the company an Overweight-A investment rating with a 6-month target price of 7.
15 yuan, equivalent to July 2019.
0x estimated P / E ratio.
Risk warning: the actual macroeconomic fluctuations, exchange rate changes, overseas business expansion is less than expected, construction project progress is less than expected, and diversified business growth is less than expected.