Research on Sangang Minguang (002110) Company: Taking advantage of regional economic development

Fujian regional leader, positioning high-quality long products enterprises.

The company is a long-process steel production enterprise in Fujian Province. The province’s crude steel output accounts for nearly 45% (the group accounts for 55%).

The main products include “Minguang” brand construction materials, metal products, medium and heavy plates, and machinery manufacturing materials. They have a total of 725 tons of long products, 150 tons of medium plates, and 80 of hot-rolled alloy stripThe ratio of heat and long plate production capacity is about 3: 1, and it is a typical leading steel company in Fujian that 四川耍耍网 mainly uses construction steel.

The supply gap will continue to expand in the future, and the premium advantage in the province will be sustainable.

After the expansion of production capacity in Fujian Province, the overall increase of steel was about 668.

5 name, but mainly high-end products.

Considering that the incremental production capacity needs to be gradually released in each year, we estimate that the steel output in Fujian Province in 2019-2021 will be 3300/3600/3800 replacements, respectively, while increasing 384/300/200 replacements.

On the demand side, taking into account the steel demand in Fujian Province, we estimate that the steel demand in Fujian Province in 2019-2021 will be 3663/3753/3810 respectively according to the fixed asset investment steel consumption coefficient method. The 3-year composite 南京夜网 strength is approximately2.

At 8%, the supply gaps formed were 363/153/10 endpoints.

Benchmark similar enterprises for efficient operation.

The company’s advanced whole-process cost reduction management and control, the three fees per ton of steel have decreased year by year, only 58 yuan / ton in 2018, which is 137 yuan / ton lower than the average value of long products companies.

Net profit of the company in 2018 18.

0%, which is significantly higher than the average of 7 for long products companies.

Zero digits, ranked first.

Since 2015, the effect of deleveraging by Sangang Minguang has been obvious. The company’s asset-liability ratio was only 31 in the first quarter of 2019.

3%, a significant decline of 45.

Six are single and have maintained the lowest level of asset-liability ratio among comparable companies.

Internal and external training, production and operation and capital operation are “double wheel” driven.

Since 2016, Sangang Group has gradually promoted the overall listing of the main iron and steel industry. Currently, only Luoyuan Minguang has not yet injected into the company’s platform.

According to the group’s commitment, when the conditions are mature, it can be merged into a listed company, and the company’s steel production capacity will increase by nearly 20% to 1155.

In addition, the company used its own funds to purchase iron 104 additive and steel 100 additive production capacity indicators, the production scale continued to grow, and the industrial layout was gradually improved.

Investment Advice.

Regarding the impact of Luoyuan Minguang injection and outsourced production capacity for the time being, it is estimated that the total operating income for 2019-2021 will be 359.

7/345.

5/357.

8 ppm, a ten-year increase of -0.

8% /-4.

0% / 3.

6%; net profit attributable to owners of the parent company is 45.

4/48.

2/54.

2 trillion, corresponding to EPS 1.

85/1.

97/2.

21 yuan, the corresponding PE is 4.

4/4.

1/3.

7 times.As a leading regional leader, you can enjoy the relative prosperity of supply and demand fundamentals within the region; the restructured company has the characteristics of high operating efficiency and high product profitability, and the profit per ton of steel has excess returns compared with the industry; therefore, the company rarely has undistributed profits in the industryIn the leading position, we believe that in addition to the necessary capital expenditures, the company can still maintain a relatively high level of dividends in the future; compared with the comparable PE valuation of comparable companies, the company also has a clear valuation advantage.

For the first time, we gave the company an “Overweight” investment rating.

Risk reminders: environmental protection and limited production, lower production capacity than expected risk; risk of higher-than-expected demand; Luoyuan Minguang injected uncertainty risk.