Q22 Results Baoshan Iron & Steel Co.,Ltd. May 22
Disclaimer The following presentation distributed herewith includes forwardlooking statements. All statements, other than statements of historical facts, that address activities, events or developments that Baoshan Iron & Steel Co.,Ltd.(Baosteel) expects or anticipates will or may occur in the future are forwardlooking statements. Baosteel s actual results or developments may differ materially from those indicated by these forwardlooking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, competition and other risks and factors beyond our control.
I. Operation Results II. Industry Dynamics
Production and Sales unit:million tons Q2 4Q2 Q22 YoY QoQ Crude steel output 6.6 6.42 6.37 3.5%.8% Sales of finished products 6.28 6.43 6.36.3%.% including:domestic 5.73 5.75 5.86 2.3%.9% export.55.68.5 7.3% 25.%
Sales Breakdown of Finished Products Note:BNA included,unit:million tons
Income Statement Summary unit:billion Yuan Q2 4Q2 Q22 YoY QoQ Revenue 54. 55.5 47.4 2.2% 4.6% Cost 5. 55. 46.5 7.% 5.7% Gross profit 6. 5.9 3.6 Gross margin%.2.6 7.6 3.6 ppts 3. ppts Operating profit 4.2.8.2 Operating margin% 7.7.4 2.5 5.2 ppts. ppts Net profit 3...2 Net profit margin% 5.7.9 2.6 3. ppts.7 ppts
Gross ProfitProducts unit:million tons billion Yuan Sales Revenue YoY Cost YoY Gross margin YoY CRC 2.5 3.9 8.4% 2.6.3% 9.2% 8.7 ppts HRC.9 8.2 3.9% 7.3 8.%.3% 5.6 ppts Heavy plate.6 2.6 2.3% 2.8 4.8% 9.2% 2.9 ppts Tube.4 2.7 5.2% 2.4.7% 9.5% 5.4 ppts Stainless steel.4 4. 4.3% 4. 9.5% 2.5% 5.4 ppts Special steel.2 2.3 27.7% 2.4 23.9% 6.% 5.4 ppts Others.5 2. 5.2% 2. 2.3% 5.4% 7.7 ppts Total 6.4 35.6.5% 33.8 5.% 5.% 5.5 ppts
Financial Highlights unit:yuan Q2 4Q2 Q22 YoY QoQ EPS.8.6.7 6.% 6.7% BVPS 6.6 6.8 6.5.2%.2% Net CFO per share.5.36.4 66.7%.% Gross margin%.8.52 7.52 3.66 ppts 3. ppts ROE(weighted)% 2.89.98.4.75 ppts.6 ppts
Solvency and Liquidity Financial index unit 223 2233 Chg Solvency Total debts/ total assets % 5. 52.6.6 ppts Current ratio.9.8.% Quick ratio.5.5 Financial index unit 2 Q22 Chg Days of receivables day 9 7 88.9% Liquidity Days of inventories day 74 82.8% Cash conversion cycle day 5 6 9.6%
I. Operation Results II. Industry Dynamics
Domestic Economy GDP growth, YoY(%) CPI growth, YoY(%) 6 7 6.4 6.5 6.2 6. 4 2 8 6 GDP up 8.% YoY, up.8% MoM in Q. GDP growth rate was lower than expected, reaching the lowest level since 2Q29. Q26 2Q26 3Q26 4Q26 Q27 2Q27 3Q27 4Q27 Q28 2Q28 3Q28 4Q28 Q29 2Q29 3Q29 4Q29 Q2 2Q2 3Q2 4Q2 Q2 2Q2 3Q2 4Q2 Q22 GDP was higher than annual target, economy is expected to grow steadily. 6 5 4 3 5.4 5.3 5.5 Mar2 Apr Data source:wind CPI up 3.6% YoY, up.2% MoM in March. May un ul Aug CPI was a little higher than expected, but inflation growth was stable and 5.5 expected downward trend. 4.2 4. 4.5 3.2 3.6 Sep Oct Nov Dec an2 Feb Mar
Demand and Supply AnalysisSupply Output of crude steel.7.63.68.57 billion tons...5.3.35.42.49.5.7. 25 26 27 28 29 2 2 Q22 Output was.7 billion tons in Q, up 2.5% YoY. Data source:wind Daily output was.99 million tons in March, reaching the second highest level in the history.
Demand and Supply AnalysisImport & Export Monthly net export 5. 4.2 4. 3.6 3.8 3. 2.8 3.2 3.43.4 3.5 3. 3.2 2.8 2.9 3. 2.8 2.6 2.5 million tons.. 2...2.9.7.6.6.4.5.7.7.5.5.5.5 2.2..5.4.5.6...2.3.2. an9 ul9 an ul an ul an2 Data source:wind Export 2 million tons in Q, up 5.8% YoY. Net export was 8.7 million tons in Q, up 38% YoY. Net export is expected 35 million tons in 22.
Demand and Supply AnalysisDemand(Infrastructure) Year FAI YoY(%) 35 35 billion yuan 3 25 2 5 8.3 29. 28.8 27.2 24.3 25.8 26.6 3.4 24.5 23.8 2.9 3 25 2 5 4.4 5 2 22 23 24 25 26 27 28 29 2 2 Q22 Data source:wind FAI was 4.8 trillion Yuan in Q, up 2.9% YoY, growth rate was slowing down.
Demand and Supply AnalysisDemand(Real Estate ) Investment New start area 8.25 billion yuan.. 7 6 5 4 3 b illio n s q u a re m e te rs....2.5..5 2 Apr9 Aug9 Dec9 May Sep Feb un Oct Mar2. Mar9 Aug9 Mar Aug Mar Aug Feb2 Data source:wind Investment in real estate was trillion Yuan in Q, up 23.5% YoY, growth rate down ppts YoY. New start area 4 million square meters, up.3% YoY, growth rate down 23 ppts YoY.
Demand and Supply AnalysisDemand(Automobile) Output Sales million output YoY% million sales YoY% 2. 48.3 5. 2. 46.5 5. 5. 35.2 27.32 22.2 32.44 4. 3. 5. 34.2 25.3 2.84 32.37 4. 3.. 4. 2.56 2.. 5.5 3.54 2. 5. 5.2.84.83.. 5. 6.7 2.45 3.4... 23 25 27 29 2.. 23 25 27 29 2. Data source:wind Output and sales were 4.78 and 4.79 million sets respectively in Q, down.8% and 3.4% YoY. Downward trend in growth rate.
Demand and Supply AnalysisDemand(Home Appliance) Output of home appliance Mar,YoY Q,YoY 4% 34.9% 3% 2% % % 4.5% 2.2% 7.7% 6.9%.9% 3.4%.2% TV washing machine refrigerator airconditioner % Data source:wind Output of TV increased fast while washing machine and airconditioner decreased in Q. The industry was influenced by the expiration of subsidy policy, especially airconditioner.
Demand and Supply AnalysisDemand(Machinery) Machinery industry growth,yoy 5% 45% 2 2 22 4% 35% 3% 25% 2% 5% %.6% 3.3% 5% % anfeb Mar Apr May un ul Aug Sep Oct Nov Dec Data source:cmif Industrial output up 3.3% YoY in Q, growth rate down 6 ppts YoY. Downward trend was as expected.
Demand and Supply AnalysisDemand(Ship Building) Shipbuilding completion 6 4 27 28 29 2 2 22 2 In million tonna 8 6 5.49 4.8 5.92 4 2 an Feb Mar Apr May un ul Aug Sep Oct Nov Dec Data source:wind Domestic ship building industry still suffered from the continuing depression in global shipping market. Completion, new order and carrying order down 23%, 49% and 25% YoY respectively in Q.
Steel Inventory unit: Million tons 29 224 33 54 YoY Chg in volumn % Rebar 6.7 8.5 8. 7.4.3 2.3% Wire.8 2.5 2.2 2..3 5.5% HRC 4.3 4.7 4.4 4..4 9.7% CRC.6.7.7.7. 3.8% Plate.5.6.5.6. 5.5% Long product 8.4..3 9.4.6 2.% Flat product 7.4 8. 7.6 7.2.3 3.8% Total 5.8 8.9 7.9 6.6.3 8.3% Data source:mysteel Inventory climbed to historical peak in February, mostly long product. Daily output exceeded 2 million tons in April and demand recovery was slow, which resulted in the slow decrease in steel inventory.
Raw Material Inventory Iron ore port inventory 45. Australian Brazil India 4. 35. million ton 3. 25. 2. 5.. an Mar May ul Aug Oct Dec Feb Apr un Aug Oct Dec Feb2 Apr2 Data source:mysteel Iron ore port inventory decreased after exceeding million tons in February. The domestic main ports inventory was about 97 million tons by 4th May.
Raw Material Cost 2 焦炭价格 Coke price 2 9 Platts(62%Fe) 62% 粉矿 Platts 指数价格走势 (CFR CFR, 美元 / 干吨 ) 226,93 242, 86 297, 83 95 9 85 8 8 7 6 235, 65 69.5 75 n a r p A l u 废钢价格 t c O Scrap price 2 n a 2 r p A 5 46.9 4 4 39 38 3 2 月 2 月 3 月 2 2 年 2 2 年 2 年指数年均价 2 年指数年均价 22 22 年 2 average 2 average 4 月 5 月 6 月 33.5 276, 6 228, 6.75 an Feb Mar Apr May un ul Aug Sep Oct Nov Dec 7 月 8 月 9 月 月 月 2 月 36 34 32 n a r p A l u t c O 2 n a 2 r p A Data source:mysteel Average iron ore price was lower than Q2, but has rebounded in Q.
Steel Price unit: Yuan/ton 4May Average 2 WoW% MoM% YoY% HRC 443 478 2.3. CRC 52 5467.6 6.6 Plate 444 483.2.4 2. Wire 48 4699.9.6 3.8 Rebar 438 499.7 4.6 Data source :Mysteel
Daily output has broken historical peak level of 2 million tons in April, high output will bring more uncertainty to the relation between supply and demand. Iron ore price still maintains a high position, while recovery of downstream demand is slow, which may lead to weak performance in traditional peak season in Q2. Market Trend 3 4 5 6 7 8 9 a n 9 A p r 9 u l 9 O c t 9 a n A p r u l O c t a n A p r u l O c t 冷轧. 镀锌. 彩涂.476 硅钢 6 Data source :Mysteel 3 34 38 42 46 5 54 58 62 66 a n 9 A p r 9 u l 9 O c t 9 a n A p r u l O c t a n A p r u l O c t a n 2 A p r 2 热轧 3. 冷轧. 螺纹 2Ⅲ 级 HR3. CR. Rebar2III CR. Galvanized. Prepainted.476 silicon6