China Metallurgical (601618) Quarterly Report Review 2019: Steady Growth and Vigorous Development of Emerging Industries
Investment Highlights: Maintain overweight.
2019Q1 revenue of 63.1 billion (+ 14%) and net profit of 18 billion (+ 6%) are in line with expectations, maintaining forecast EPS0 for 2019-2021.
40 yuan (13% / 8% / 7% growth).
Considering the expected recovery in infrastructure / the company’s efforts in emerging industries, we will give 12 times PE in 2019 and maintain a target price of 4.
2 yuan, overweight.
The 四川耍耍网 growth rate of net profit rose slightly, and operating cash flow was under pressure.
1) Revenue growth rate of 14% in 2019Q1, faster growth in the context of a high base in 2018Q1 (2018 single quarter growth rate of 25% / 25% / 11% / 16%); net profit growth rate of 6%, single quarter growth rate 2 quarters rebound (2018Q3 / Q4 growth rate -2% / 4%), the growth rate of net profit is lower than revenue dragged down.
2) Gross margin / net margin 12.
7% / 3.
4%, a change of +0 from the first quarter of 2018.
05 / -0.
15pct, the decline in net interest rate and the percentage of impairment increased by 0.
3) Sales / management (including R & D) / financial expense ratio is 0.
7% / 4.
5% / 1.
3pct, a change of 0 / -0 from the first quarter of 2018.
1 / -0.
4) Operating cash flow -13.9 billion (2018-Q1: -12.9 billion).
5) Asset-liability ratio 76.
8%, an increase of 0 from the end of 2018.
Q1 overseas orders increased rapidly, non-metallurgical orders accounted for 87%.
1) The average unit price for the whole year of 2018 was 665.7 billion (+ 10%) as revenue2.
Three times, the engineering contracting contract (628.7 billion, + 13%) in the metallurgical project 1111.1 billion (+ 18%) / non-steel engineering 517.6 billion (+ 9%).
2) In the new year of 2019Q1, it is 182.1 billion (+ 5%), and the growth rate has improved (2018Q3 / Q4 growth rate + 21% / + 11%), overseas / domestic growth rate + 41% / + 4%, accounting for 4% / 96%.
By industry, housing, infrastructure, metallurgy, and other orders increased by 27% /-34% / 5% / 65%, accounting for 53% / 20% / 13% / 14%, and non-metallurgical engineering orders accounted for 87%.Business diversification continued to advance.
Vigorously develop new industries, and hope to reform the beneficiary countries.
1) Promote the productization industry of core technologies in the metallurgical field and accelerate the pace of internationalization to maintain the advantage of the front runner.
2) As the country ‘s first underground pipe corridor builder, expand capabilities in this field; actively expand emerging areas such as comprehensive pipe corridors / sponge cities / beautiful villages and smart cities / theme parks / wellness / water environment / 佛山桑拿网 assembly buildingsBusiness structure is continuously optimized.
3) Selected as a double-hundred enterprise, hopes that the beneficiary country will reform.
Risk warning: slow progress in diversified businesses, rapid segmentation of infrastructure investment, etc.