Sinosteel International (000928) First Coverage Report: Deep Plowing Industrial Engineering Accelerates Development of Diversified New Business
This report reads: In order to promote the layout of the four major areas of industry / municipalization / energy conservation and environmental protection / emerging, the expansion of overseas business will benefit the Belt and Road Initiative. Domestic business is growing rapidly and future development is worth looking forward to.
Key points of investment: For the first time, cover the level of cautious increase.
The company locates engineering companies with strong business in the steel industry and coordinated development of mining and power, and lays out energy conservation and environmental protection / emerging. We predict that EPS in 2019-21 will be 0.
The growth rate of 55 yuan is 19/15/14%; with reference to comparable companies in the same industry, the company is given 15 times PE in 2019 with a target price of 6.
3 yuan, for the first time covering a prudent increase in holdings.
Based on the main business of industrial engineering, actively diversify the business.
1) Four major directions of the company’s business layout: industrial engineering and industrial services based on steel / electricity / coking chemical / petrochemical / metal mining and other fields; municipal engineering and investment operations based on urban infrastructure;Main energy saving and environmental protection for water / solid waste management / clean energy utilization; development centered on intelligent manufacturing and new materials industry; 2) The company has the general contracting capacity of comprehensive supporting projects for large iron and steel joint ventures, and can provide comprehensive supporting for the entire process of engineering projectsServices; 3) The company strengthens the development of upstream and downstream business of the main metallurgical process, expands engineering contracting in the fields of mining / environmental protection / 佛山桑拿网 electricity, etc .; extends the service chain, and actively promotes market development in areas such as industrial gas / urban sewage treatment;In-depth cooperation between chemical companies in the fields of coal coking and environmental protection and energy saving.
The order protection in hand is high, and the overseas deployment will benefit the Belt and Road.
1) The company deeply cultivates overseas as an outstanding company in the international engineering field. In 2019H1, overseas revenue will account for 46% and orders account for 58%; 2) At the end of H1, the contract in hand will be about 40 billion yuan / guarantee multiple4.
8 times the benefits of orders in hand is a strong guarantee for future revenue growth; 3) The company continues to strengthen the development of markets in countries along the Belt 上海夜网论坛 and Road along the Middle East / Russia / Southeast Asia, and successfully achieves a large number of major overseas projects such as Iran’s integrated steel mills / Russia sintering;Subsequently, it will continue to benefit from the Belt and Road Initiative. 4) Considering the demand substitution of capacity conversion / upgrade / relocation and retreat from cities and parks in the context of domestic steel companies’ capacity reduction, the company will protect domestic orders.
Catalysts: Accelerated overseas layout, accelerated domestic industrial investment, accelerated landing orders, and other risk factors: sluggish industrial investment growth, receivables risk, and order execution exceeded expectations