Sinosteel International (000928): Russia’s coking projects expand capacity

Sinosteel International (000928): Russia’s coking projects expand capacity

Event description On June 3, the company issued an announcement on the progress of daily major contracts. Recently, the company and Russia Magnitogorsk Iron and Steel Co., Ltd. signed a supplementary agreement for the new EPC general contracting contract for a new 250-year coking project with relevant contentChanges and supplementary agreements were made.

The amount of the incident review project has been further expanded, and the construction period has improved.

The contract was signed around December 2018. The changes in the supplementary agreement of this contract are mainly reflected in two aspects: 1) The construction content of the design, supply and construction safety by adding mixed gas heating, 46 before the contract price adjustment.

RMB 870,000 was changed to 49.

6.2 billion yuan, accounting for 56% of the company’s 2018 revenue.

02% increased to 59.

31%; 2) The construction period of the contract has been improved. The construction period has been changed from the initial “50 months from the second phase” to “expected to start production in 2022”. The contract period has been gradually promoted to help the company accelerate revenue recognition and payment recovery.

As of now, the project has entered the full implementation stage and received an advance payment from the owner4.

3.9 billion.

Coking business realizes technology and market breakthroughs, and it is expected to become a stable revenue growth pole in the future.

The forthcoming Russia 250 initial coking project is the company’s first EPC general contracting project in the Russian market, and it is also the first large-scale coke oven of 7 meters or more for domestic companies to go abroad.

In addition, in 2018, the company won 350 coking projects in Fangchenggang, Liugang, Guangxi in the domestic market, which is the first 7 built by the company.

5 meters large-scale top-mounted coke oven, while India’s JSW300 socket coking, 140-ton dry quenching project also helped the company break 深圳spa会所 through the large coking oven and dry quenching project in the Indian coking market.

The undertaking and implementation of the above-mentioned projects, through the company’s coking business to achieve double breakthroughs in technology and market, is expected to become the company’s steady income growth in addition to the main business of steel engineering.

The output value is expected to accelerate, and breakthroughs in the reform of state-owned enterprises are worth looking forward to.

As of the end of March 2019, the company had executed unfinished and contracted projects that had not been started for a total of about 38.4 billion yuan, which was 4% of revenue in 2018.

6 times, which effectively guarantees the accelerated release of output value in 2019; the company’s 2018 directors’ work report pointed out that the main strategic arrangements for 2019 include the possibility of promoting “internal enterprise reform of mixed ownership” and other strategic possibilities, which are translated into “active participation in the reform of state-owned enterprises”化激励”方案”及“扎实推进公司’双百行动’工作”等列入2019 年工作重点,未来有望实现新的突破。The company’s EPS for 2019-2020 is expected to be 0.

48 yuan, 0.

57 yuan 1, corresponding to the implementation of 2019/06/03 PE is 11 respectively.

55 times, 9.

63 times, maintain “Buy” rating.

Risk Warning: 1.

Business progress is less than expected; 2.

The landing of overseas project financing fell short of expectations.