Baosteel (600019) 2019 Third Quarterly Report Review: Iron Ore Inventory Cycle Breakdown, Third Quarter Results Under Pressure

Baosteel (600019) 2019 Third Quarterly Report Review: Iron Ore Inventory Cycle Breakdown, Third Quarter Results Under Pressure

In the first three quarters of 2019, Baosteel achieved operating income of 2,168.

76 ppm, a decrease of 3 per year.

75%; Net profit attributable to shareholders of listed companies 88.

74 million, down 43 each year.


  Comment: Production and sales.

In the third quarter of 2019, the company 武汉夜生活网 completed iron production of 1,179.

6 Cobalt, steel output 1243.

7 Cobalt, 1210 sales of commercial billets.


In the first three quarters of 2019, the company gradually completed iron production of 3462.

3 Cobalt, steel production 3672.

3 blanks, sales of commercial blanks 3545.

8 nominal.


In the third quarter, the production and sales of automobiles improved slightly. The prices of other types of cold-rolled products dropped the least before, and the market price of ordinary cold-rolled products only dropped by about 30 yuan.

The company’s price adjustment is relatively independent of the market price. In the third quarter, Pu Lian raised the cumulative price by 250 yuan, the average price by 80 yuan, the hot rolling by 50 yuan, and the average price by 13 yuan.

Therefore, the company’s maximum ceiling was firm in the third quarter, and its operating income increased by 500 million yuan compared with the second quarter, and exceeded 200 million yuan.

In October and November, the company’s general cold continued to raise prices, and the price of hot rolling was reduced to a certain extent, and each other transformed each other. The expected change in revenue in the fourth quarter.


The company’s iron ore inventory is about two months, which is the continuous inventory cycle of domestic steel mills.

Since the vale accident, the price of iron ore has risen sharply, including an average monthly price of $ 99 in May, an average price of $ 109 in June, an average price of $ 120 in July, and an average price of $ 109 in the second quarter.With a price of US $ 22, the company’s single-season output was about 1150, and the cost of iron ore alone increased by about 1.7 billion, consistent with the cost increase of 1.8 billion shown in the report.

Since August, iron ore has returned to the price of about $ 90, and the cost of iron ore will drop significantly in the fourth quarter.

Earnings forecast, forecast and investment rating: The company’s 3Q results are under pressure, and the 4Q results are expected to improve marginally.

Due to the recovery of iron ore production and the decline in overseas demand, the iron ore price center has moved downward since August, and the company’s production costs in the fourth quarter will gradually fall. In the case of the general cold price adjustment and the hot rolling price adjustment, the four quarters will be offset.
Revenue is expected to change little, and performance is expected to improve marginally.

We forecast a revenue of 2958 for 2019-2021.



25 trillion (previous forecast 2962.



3.3 billion), net profit attributable to mother is 132.



5.3 billion (previous forecast 146.


43ppm), the corresponding EPS is 0.


75 yuan (the original forecast was 0.



81 yuan), the corresponding PE is 10/9/8 times (the original forecast was 8.



22 times).

The company is a leader in sheet metal, with a high product premium and high expected dividends. Based on a 50% dividend payout ratio, the actual dividend is 0.

3 yuan, the corresponding dividend payment subsidy of 5%, combined with the company’s historical estimates and industry conditions, will be given to the company 11.

7 times PE, corresponding target price is 7 yuan, maintain “recommended” level.

Risk reminders: Demand stalls, supply continues to increase, and Sino-US trade frictions intensify.