Qilian Mountain (600720): Sales of Ganqing rebounded sharply
Event Overview: The company announced its interim report on August 14.2019H1 company realized revenue 29.100 million increase by 23.9%, net profit attributable to mother 5.0 billion increased by 128.8%, net profit after deduction is 4200 million increase by 77.9%. Rising sales in 2019H1 and falling costs have driven earnings beyond expectations.The company’s profit slightly exceeded market expectations.Thanks to the recovery of infrastructure in Qinghai, Gansu, the company’s cement sales volume increased by 965 in 2019H1.5%, the increase in sales volume at the same time brought about unit cost dilution, the first half of the cement ton cost interval fell by 18 yuan / ton to 178 yuan / ton, but due to the low base caused by the decline in cement prices in Ganqing region since 2018H2, the company’s average cement thickness is at leastA reduction of 8 yuan / ton to 277 yuan / ton resulted in a slower improvement in gross profit per ton than a cost improvement (measured to increase by more than 10 yuan / ton to 99 yuan / ton). The decline in asset interest rates has improved the medium- and long-term profit center.In 2019H1, the company’s interest resistance decreased by 6 compared with the end of 2018.650,000 yuan, so the asset-liability ratio dropped to 31.3%, financial expenses are reduced by about 25 million yuan each year.The reduction of interest-bearing debt and the reduction in the asset-liability ratio are conducive to the improvement of the company’s 西安耍耍网 medium- and long-term profit center. The benefits brought by the cash cows of cement companies have become more and more significant. Initially maintained a high growth trend.Northwest China has sufficient infrastructure reserve projects, government financing has improved in 2019, and the demand side is expected to grow steadily.After experiencing price increases in the second quarter of 2019, the instantaneous price of cement in the Ganqing region has not extended to the same period last year. We believe that the company’s cement and concrete business will continue to be strong in the second quarter of 2019 and gradually generate high elasticity. Investment suggestion: The company is expected to have a net profit of 10-20 years.7/12.3/12.90,000 yuan, an increase of 63 in ten years.6% / 14.4% / 5.5%.Give the company an average estimate of 10 based on the two methods of price-earnings ratio and price-to-book ratio.92 yuan / share, the first coverage given a “buy” rating. Risk reminder: The execution of local infrastructure projects is lower than expected, causing the profit of cement prices to exceed expectations, coal prices higher than expected, causing costs to be higher than expected, systemic risks.