Xining Special Steel Steel Structure Upgrade

Xining Special Steel issued the 2012 annual report. During the reporting period, the company realized operating revenue of 6.871 billion yuan, a year-on-year decrease of 16.29%; operating costs of 5.65 billion yuan, a year-on-year decrease of 13.29%; and net profit attributable to parent company of 31 million yuan, a year-on-year decrease of 90.28%. The realization of EPS is 0.04 yuan. Among them, in the fourth quarter, the company achieved operating income of 1.67 billion yuan, a year-on-year decrease of 15.97%; operating costs of 1.37 billion yuan, a year-on-year decrease of 16.16%; and a net profit attributable to the parent company of 0.20 billion yuan, an increase of 665.70%; the fourth quarter EPS was 0.03 yuan. In the third quarter, the economy experienced a deceleration of -0.06 yuan, and the steel industry and resources business experienced a year-on-year decline. In the context of declining business climate and sharp declines in steel ore prices, the company's net profit fell by 90% year-on-year in 2012, providing a resource advantage. The company is also hard to change the downward trend in profits. However, despite the downturn, iron concentrates and coking coal still contributed most of their profits, making the company still able to achieve low profit in 2012 when the steel business suffered a loss. In addition, the continued high debt-to-asset ratio has caused the company to bear greater financial pressure. The annual 6.73% financial expense rate is obviously higher than the industry average.

The production recovery led the fourth quarter revenue growth, the gross profit margin rebounded, and the net profit turned around. Compared with most special steel companies, the sharp decline in output in the third quarter returned to normal in the fourth quarter. In the fourth quarter, the output increased by about 20% from the previous month, and the operating income was driven by the chain growth when the price of special steel fell slightly. In terms of profitability, the rebound in the industry boom in the fourth quarter led to a recovery momentum for the company's iron and steel industry's gross profit margin. At the same time, the increase in ore prices and coal prices also increased the gross profit margin of the company's non-steel industry. The company's gross profit margin in the fourth quarter was 3%. 15.02% in the quarter increased to 17.94%, which ultimately led to a net increase in net profit. The net cash flow from operations decreased. The company’s inventory at the end of the fourth quarter was 1.118 billion yuan, which was higher than the previous quarter, which was due to the increase in raw material inventory. . In the fourth quarter, the net cash flow from operating activities of the company was -179 million yuan, which was lower than the -0.78 billion yuan in the third quarter. The major industry structure of special steel was upgraded, and the northwestern resources were actively developed: The company raised the investment project size bar line technical transformation project It will be beneficial to the upgrade of the company's special steel product structure, and the technical transformation of the previous blast furnace has been completed. Therefore, the technical reform will not affect the company's normal operating activities, and the company's main steel industry will continue to grow in the future. In addition, the company also has abundant resources advantages. While expanding production capacity on the basis of existing resources, it will further expand its control over resources. It is expected that the EPS of the company in 2013 and 2014 will be 0.19 yuan and 0.25 yuan, respectively. Ratings.