Baosteel (600019) ex-factory price review for April 2019: Ex-factory price significantly increased in April
The ex-factory price of April futures increased significantly by 300-400 yuan / ton, the largest increase in the same period in recent years.
The ex-factory price of Baosteel April futures products in April 2019 was mainly a significant price increase of 300-400 yuan / ton, and the Q2 2019 ex-factory price situation tried to recover.
Looking back at the company’s April price adjustments, this year’s increase was the highest in many years, indicating that the company may be optimistic about the outlook for the steel industry in April 2019 and the trend of steel prices.
The rebound in steel prices in the market helped the company’s ex-factory price to rise, and the ex-factory price of cold-rolling has been flat for many years.
In the first quarter of 2019, the market steel price showed a gradual recovery trend, which caused the premium of Baosteel’s ex-factory price to the market’s steel price to gradually decrease. The company’s significant increase in the ex-factory price in April was a response to the recent market situation.Return the company’s product premium upwards.
The company’s ex-factory price of cold-rolled products in April has been flat in October 2018 and November levels, the highest in many years.
The recent high cost of mining coke has also pushed up the company’s ex-factory price.
We simulated the cost of hot-rolled and cold-rolled mineral coke for the current month. The average monthly increase in February 2019 was about 185 yuan / ton, which made the company’s 2019Q1 steel product simulated gross profit at a low level since 2017.
The company significantly raised its ex-factory price in April, which was also a response to the rising price of mining coke.
In April, Baosteel’s ex-factory price relative to the market’s brand premium level: at a relatively high level in history.
Assuming that the average market steel price in April is the same as the current price, Baosteel ‘s April hot rolling premium to the market is 869 yuan / ton, which is 184 yuan / ton higher than the historical average premium. The 武汉夜生活网 cold rolling market premium is 1087 yuan / ton, compared withThe historical average premium is 475 yuan / ton higher.
The hot-rolling premium is at a relatively high level in history, but it is lower than the highest level in history (1,309 yuan / ton for hot rolling and 1,609 yuan / ton for cold rolling).
The industry leaders are highly competitive and have high dividend expectation. We maintain the rating of “overweight”.
The company’s ex-factory price rose by 300-400 yuan / ton in April, which is conducive to Q2 performance.
The company’s overall high dividend expectation, Yancheng project is expected to provide long-term strategic benefits.
We maintain the company’s expected EPS for 2018-2020 to be 0.
95 yuan, 0.
76 yuan, 0.
76 yuan, maintain “overweight” rating.
Risks indicate the risk of falling 杭州夜网 steel prices; the relocation of Meisteel and the construction of the Yancheng boutique steel base project are less than expected; the risks of corporate governance and the risk of market fluctuations.