The listed companies under Sinosteel Group include: Jinzi Tianzheng, Antai Technology, Sinosteel International, Sinosteel Tianyuan, Qilianshan, and Sinoma Energy Conservation.
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Sinosteel International: The group’s debt-to-equity swap was approved, and its financing capacity was greatly increased to help it take off
Sinosteel International recently issued an announcement , received notification from the controlling shareholder Sinosteel Corporation that the group’s debt restructuring plan was officially approved. Sinosteel will take the debt restructuring as an opportunity to strive to become an international enterprise group that provides resources, technology, engineering, and equipment integration services for the metallurgical industry and related industries.
The group fell into a debt crisis, and the company's financing capabilities were significantly restricted. Sinosteel Group is the actual controller of the company. At the end of 2013, its total assets were 110 billion yuan and total liabilities were 103.3 billion yuan. Affected by the sharp drop in commodity prices, the China Development Bank's 690 million yuan loan to Sinosteel Group was overdue in 2014, and debt problems began to emerge. In December 2014, the China Banking Regulatory Commission and the State-owned Assets Supervision and Administration Commission coordinated the establishment of a debt committee. According to its statistics, as of December 2014, Sinosteel Group and its 72 subsidiaries had debts of more than 100 billion yuan, including nearly 75 billion yuan in debt from financial institutions, involving More than 80 banks at home and abroad. The group's debt default has triggered many banks to withdraw or reduce the size of loans to the group and its subsidiaries, significantly limiting the company's financing capabilities.
The internationalization strategy is effective, but the bottleneck constraints are more obvious. Internationalization is an important strategy for the company to solve the bottleneck of demand in the domestic metallurgical engineering market. Statistics from the company's operating contract announcements since 2015 show that 86% of orders come from overseas, and the proportion of overseas revenue increased from 26% in 2015 to 50% in 2016H1. The internationalization strategy has achieved remarkable results. However, it was found in the annual report that most of the company's cooperative banks are small and medium-sized banks. The reason may be affected by the group's debt problems. Since small and medium-sized banks have small credit lines and high loan costs, it is obviously not conducive to engineering companies. More importantly, the company's overseas development The business requires a performance guarantee recognized by overseas owners or financial institutions (generally large financial institutions), so the constraints on the company's development are more obvious.
The group’s debt-for-equity swap plan has been approved. The company’s financing environment is expected to improve significantly, and order acceptance and implementation can be accelerated. Sinosteel Group's debt-for-equity swap plan was approved, becoming the first state-owned enterprise to undergo a new round of market-oriented debt-for-equity swaps. Many banks are expected to become indirect shareholders of listed companies, and restrictions on corporate loans are expected to be relaxed. For an engineering company, it can not only greatly improve the company's order-taking capabilities, but also speed up the implementation of its orders. The company's current orders are sufficient, and its performance is expected to explode.
1) An operating turning point appears: there are sufficient orders in the short term, the group's debt-for-equity swap plan has broken the company's financing bottleneck, and 112 middle and senior managers with an average capital of 1.36 million yuan per capita have participated in private placements, providing a strong impetus for performance release; In the long run, internationalization and diversification provide huge market space; 2) The valuation is low, the increase is small, and the fixed increase of 14.31 yuan for 3 years provides a strong safety margin; 3) The accelerated implementation of PPP and the industrialization of 3D metal printing are expected to catalyze Company Valuation.
Profit forecasts and valuations. It should be pointed out that the impairment of the company's available-for-sale financial assets (mainly CuDeco: stocks) affects net profit, but the group has a special commitment to make up for the difference, so the market has underestimated the company's actual performance to a certain extent. Considering the dilution factor of additional issuance, the EPS in 2016-2017 is expected to be 0.68 yuan and 0.99 yuan respectively, giving a dynamic price-earnings ratio of 20 times in 2017 and a six-month target price of 19.72 yuan.
Jinzi Tianzheng: The main business is recovering, and traditional advantages are boosting the new industrial automation business
The company’s net profit attributable to the parent company from 2016 to 2018 is forecast to be 21 million, 25 million and 29 billion, the corresponding EPS are 0.09 yuan, 0.11 yuan and 0.13 yuan respectively.
The company is mainly engaged in the research and development, production, sales and undertaking of automation engineering and technical services for a series of products in the field of industrial automation. It can provide users with systematic, advanced, customized and cost-effective comprehensive industrial automation solutions. In recent years, the downstream steel industry has been in recession. The company has actively explored the field of industrial automation outside the steel industry and has achieved initial results. Among them, intelligent control technology, metallurgical process automation complete technology and application software are at the leading domestic and internationally advanced levels.
The profit level in the first half of 2016 reached expectations, and the main business operations have recovered. In the first half of 2016, the company achieved operating income of 296.375 million yuan, an increase of 8.06% over the same period of the previous year; operating profit of 14.9081 million yuan, an increase of -3.06% over the same period of the previous year; net profit attributable to shareholders of listed companies was 1,461.70 million, an increase of 8.33% over the same period last year. Operating income mainly comes from the steel industry, totaling 225.0665 million yuan, accounting for 75.94%.
In recent years, the company's main business operations have recovered, and the change in operating income was mainly due to the increase in the company's completed settlement projects during the reporting period. Among them, the parent company achieved a net profit of 13,482,862.79 yuan, accounting for 90.36% of the company’s consolidated net profit during the reporting period. The holding subsidiary Shanghai Jinzi Tianzheng Information Technology Co., Ltd. achieved a net profit of 7,048,691.14 yuan during the reporting period, accounting for 90.36% of the company’s consolidated net profit during the reporting period. 47.24% of the consolidated net profit during the reporting period.
Antai Technology: Business integration is accelerating, and amorphous strip performance is booming
In the 2016 interim report, revenue fell by 2.28% year-on-year, and net profit fell by 8.76% year-on-year. On August 30, the company released its interim report. In the first half of 2016, the revenue was 1.92 billion yuan, a year-on-year decrease of 2.28%; the net profit attributable to the parent company was 12.976 million yuan, a year-on-year decrease of 8.76%.
The net profit attributable to the parent company declined in the second quarter, mainly due to business integration costs, losses in welding services, decline in high-speed tool steel revenue and early inclusion of bond interest payments. First, during the reporting period, the company accelerated the disposal of inefficient and ineffective assets and businesses, accelerated the integration of magnetic materials, powder metallurgy and welding businesses, resulting in some expenses. The second is the loss in the welding business. Although Sanying Welding only lost 1.525 million yuan, the welding branch suffered a large loss in the first half of the year, which directly affected the performance of the parent company. Third, high-speed tool steel business revenue fell by 18.6%. Heye Technology lost 5.229 million yuan in the first half of the year, and its net profit in the same period last year was 10.783 million yuan, which dragged down its performance. Fourth, the company has arranged for the accrual of bond interest payments in advance.
The performance of amorphous strips is booming. Antai Nari's 2016 interim report net profit increased by 259.4% year-on-year. In the first half of 2016, the company's amorphous strip business fully benefited from anti-dumping and production capacity release, and Antai Nari's operating income 322 million yuan, a year-on-year increase of 39.39%, and net profit was 50.156 million yuan, a year-on-year increase of 259.4%. It is expected that in the future, with the commissioning of amorphous strip line 7-8, the performance will be accelerated.
Tianlong Tungsten and Molybdenum is officially consolidated, and the performance of refractory materials is in line with expectations. Tianlong Tungsten Molybdenum’s operating income in 2016 was 257 million yuan and net profit was 46.96 million yuan.
Antai Environmental's performance has been released rapidly, with a net profit of 12.657 million yuan in the 2016 interim report. Antaihuan's 2016 interim report reported revenue of 106 million yuan and net profit of 12.657 million yuan, a huge leap forward from before the mixed-ownership reform. With sufficient orders on hand, it is expected that net profit will grow rapidly in 2016.
The company is reborn through mixed-ownership reform and has strong growth potential. First, the three major turning points in 2015 development strategy, incentive mechanism and operating performance have arrived. Second, the major shareholders have promised to inject rare earth resources before the end of 2016, and the magnetic materials business has fully benefited from the increase in rare earth prices. Third, there is huge potential for endogenous growth, and high growth in main businesses such as amorphous strips and powder metallurgy is expected. Fourth, it has strong external strength, abundant resources in the upstream and downstream of the industrial chain, and huge space for capital operation.