Ordos (600295) 2018 Annual Report Comments: Benefiting from Increase in Alloy Price and High Growth Performance

Ordos (600295) 2018 Annual Report Comments: Benefiting from Increase in Alloy Price and High Growth Performance
Investment Highlights: The company released its 2018 annual report: the internal company achieved operating income of 238 in 2018.5.8 billion, an annual increase of 7.82%; net profit attributable to mothers9.23 ppm, an increase of 77 in ten years.24%, about EPS 0.89 yuan, the performance basically in line with our expectations, of which in the fourth quarter of 2018 achieved a total operating income of 58.1.7 billion, a decrease of 13 a year.98%, a month-on-month decrease of 23.38%; net profit attributable to mothers4.25 ppm, an increase of 168 in ten years.23%, an increase of 93 from the previous month.89%.RMB 1 for every 10 shares.50 yuan (including tax) dividends.The corresponding dividend rate is 11.18%. The price of alloys that have initially benefited has risen, profitability has improved significantly, and asset impairment losses have dragged down net profit.In 2018, due to the normalization of environmental protection and limited production of ferrosilicon, the price of alloys increased significantly, the profitability of the industry rebounded, and the average average prices of ferrosilicon and silicomanganese rose in Inner Mongolia.76% and 18.17%.Benefiting from this, the company initially produced ferrosilicon 161.65 cobalt, silicon manganese 37.38 Initially, at least growth of 7 respectively.05%, a decrease of 22.13%.The company’s ferrosilicon business gross margin was 22.88%, with an annual increase of 1.45 single, silicon-manganese alloy business gross margin of 16.34%, with a single annual increase of 9 single indicators, helping the company to achieve high annual performance growth.Obviously, due to the serious increase in inventory loss and fixed asset impairment losses, the asset impairment losses on assets reached 6.1.2 billion, an increase of 73 in ten years.48%, there must be a drag on net profit.Overall gross profit increased in the fourth quarter, and actual income decreased.Among them, the company’s fourth-quarter performance increased at the same period last month, depending on the improvement of the company’s overall product gross profit margin, and the company’s comprehensive gross profit margin in the fourth quarter.91%, the previous increase of 9 averages, an increase of 11 ratios; the replacement company’s fourth-quarter yield of 13.80%, a decrease of 9 averages previously and a decrease of 17 averages from the previous quarter.Asset-liability ratio and financial expense ratio were the lowest.The company’s asset-liability ratio was 67 at the end of the year.96%, a decrease of 2 over the same period last year.02 points, the best level since 2011, mainly due to an increase of 98 in monetary funds.26%.The company’s highest financial expense ratio is 6.07%, which also reached the highest and best level, with short-term extensions and long-term declines exceeding 4 per year.1% and 13.75%. It is expected that the price of ferrosilicon silicon manganese 2019 may improve.On the supply side, more new capacity will be put into production in the second half of 2018 and Ningxia, Shaanxi, and Xinjiang in 2019.According to Mysteel data, the national ferrosilicon output in 2018 was 535 inches, an increase of 20 per year.95%, of which, the output in the second half of the year increased month by month.From January to February 2019, the production of ferrosilicon increased by 11 per year.93%.Similarly, the production of silicomanganese has also begun to increase from mid-2018, with an annual increase of 14%.88%, a 10-year increase from January to February 20198.39%.On the demand side, although the current steel industry has increased profits, production is expected to continue. In January-February 2019, the incremental output of pig iron, crude steel and steel products were 12659, 14958 optional and 17146 unique, respectively, an increase of 9 respectively.8%, 9.2% and 10.7%.In general, through the marginal reduction of environmental protection and limited production and the commissioning of additional production capacity in 2019, the supply of alloys will increase, but the demand for steel on the demand side will also increase. It is expected that ferrosilicon silicon manganese will continue to supply and demand in 2019.Prices may change and improve the profitability of the steel industry. It is proposed to acquire shares of the power metallurgy company to further strengthen the “coal-electricity-silicon ferroalloy” industry chain.The company’s complete “coal-electricity-silicon ferroalloy” industrial chain, owns coal mines and pithead self-contained power plants, produces almost 100% self-sufficient power, and the cost of electricity accounts for about 70%, 20%, 50% of the production cost of ferrosilicon, silicon-manganese, and PVC%, So the price of the alloy will increase the company’s performance flexibility.The company currently holds Mongolia Ordos Power Metallurgy Group Co., Ltd. 63.With 91% equity, the company plans to acquire the power metallurgy held by the Mongolian Ordos Cashmere Group Co., Ltd. within the company’s shareholders by issuing shares.06% equity, thereby further strengthening its metallurgical integrated industrial chain. Lowered profit forecast and downgraded to “overweight” level.The company’s “circular economy” model has strong advantages in terms of raw material reserves and power costs.It is expected that the price of ferrosilicon silicomanganese will increase with the profits 杭州夜网论坛 of the steel industry.Reduce 2019-2020 return to mother’s net profit7.83/7.2.3 billion, (was 14.17/18.540,000 yuan), plus the net profit forecast for mothers in 2021 is 7.50,000 yuan, corresponding to EPS 0.76/0.70/0.68 yuan, currently corresponding to PE 11.8/12.8/13.1 times.Downgraded to “overweight” level!