Dongfang Cobalt (000962): 1H19 deduction of non-post-profit profit to reverse losses and increase investment income

Dongfang Cobalt (000962): 1H19 deduction of non-post-profit profit to reverse losses and increase investment income

1H19 results are consistent with the announcement. The company announced 1H19 results: revenue 3.

0 billion US dollars, a year-on-year decrease of 41%; net profit attributable to mothers is 292 million, corresponding to a profit of 0.

01 yuan, net profit after deduction to non-returned mother is -5.57 million yuan, extended quota 北京桑拿洗浴保健 reduced by 18.11 million yuan, non-recurring gains and losses mainly come from government subsidies of 7.81 million yuan.

In the second quarter of 19, the company’s operating income was 1 for the quarter.

US $ 300 million, a year-on-year decrease of 53% and a month-on-month decrease of 24%.

20,000 yuan, down 101% / 103% year-on-year.

Comments: 1) 1H19 comprehensive gross profit margin increased by 3.

9ppt to 14.


2) ≤, the production and sales of Tanzania’s main products decreased.

3) The overall cost has dropped.

1H19 company’s sales expenses decreased by 29% or 137 million, mainly due to reduced sales and freight, management costs decreased by 13% or 5.98 million yuan, mainly due to reduced depreciation and amortization after placing assets, research and development expenses decreased by 55% or 3.86 millionFinancial expenses have been reduced by 20% or 2.96 million yuan per year, mainly due to the decline in interest expenses.

1H19 company’s management expense ratio and financial expense ratio are +4 respectively.

2ppt and 1.

0ppt to 12.

9% and 3.


4) The net income from investment in 1H19 was 11.64 million yuan, which was higher than -1.23 million in 1H18. None of them resulted in changes in fair value.

5) 1H19 effective tax amount 9.

3%, an increase of 9 per year.


6) 1H19 cash flow from operating activities for three years +3.

6x to 1.


Development trend The impact of asset replacement has begun to bear fruit.

After the company’s asset replacement was completed in November last year, the business was concentrated in the secondary main business. In 1H2019, the asset placement increased the company’s investment income, and the asset placement reduced the company’s substitution.

In the medium and long term, we believe that the development and expansion of non-ferrous materials processing are expected to increase product added value.

Earnings Forecasts and Estimates As the company puts assets and output, and price assumptions change, we lower our 2019/2020 earnings forecasts by 69% / 67% to 0.

02 yuan / 0.

02 yuan.

The company’s current consensus corresponds to 2019/20202.

9 times / 2.

9 times price-to-book ratio.

Maintain Neutral rating and 8.

Target price of 0 yuan, corresponding to 3.

1x 2019 P / B ratio and 3.

Doubled in 2020, the P / B ratio will continue to be 7 compared with the recent period.

8% upside. The sales of risk products fell short of expectations, and prices fell more than expected.