Qilian Mountain (600720): The demand for infrastructure development is picking up, and the performance of Ganqing’s leading group is remarkable.

Qilian Mountain (600720): The demand for infrastructure development is picking up, and the performance of Ganqing’s leading group is remarkable.
The event company issued a 2019 semi-annual performance pre-announcement announcement. The announcement 南京龙凤网 showed that the company’s net profit attributable to shareholders of listed companies in the first half of the year was about 50 million yuan, an increase of about 128%; after eliminating non-recurring gains and losses,The company estimates that the net profit attributable to shareholders of listed companies in the first half of the year will be about 415 million yuan, an annual increase of about 93%. Opinions cement volume and price go up, driving performance to be good.The company expects to realize non-net profit deduction in the first half of the year4.About 15 billion yuan, a substantial increase, mainly due to the company’s Ganqing region where the cement production and sales and prices rose. According to the data of Digital Cement Network, the cement output in Gansu region reached 1353 from January to May of 19th.In 1995, the annual growth rate was 17.47%, a growth rate ahead of the rest of the Northwest; cement production in Qinghai was 361.03 budget, overall output decreased, slightly reduced 4.18%.In terms of prices, the average price of cement in the northwest region in the first half of the year reached 374 yuan / ton, a slight increase over the past year.The rise in volume and price is mainly due to the stability of the supply side, and the demand in the Northwest has recovered. Visual data show that the amount of fixed asset investment in Gansu Province from January to May increased by 4%.1%, and has been floating in 17-18 years. The initial monetary easing and the issuance of special debt stimulated the demand for local infrastructure to pick up. It is expected that the demand trend will maintain a positive growth. Northwest Cement’s investment logic is on the demand side, and infrastructure continues to drive the industry’s prosperity upward.The amount of cement used in Northwest China is mainly concentrated in infrastructure construction. Benefiting from improved liquidity and infrastructure shortcomings, the overall cement demand in Northwest China has picked up, and Gansu Province, the company’s core region, has performed well.In the list of major projects announced by the Gansu Provincial Development and Reform Commission at the beginning of the year, eight railway construction projects, 27 highway construction projects, and numerous major airports, water conservancy and other major infrastructure projects were designed. According to the statistics of the Gansu Provincial Development and Reform Commission, the construction and planning of the whole province will be continued from January to May this year.A total of 390 investment projects were completed in 128 newly launched major projects.3 trillion, accounting for 31 of the annual plan.1%, an increase of 8 percentage points from the same period last year. It is expected that local infrastructure will maintain stable growth in the next year. In the long run, new capacity and other businesses are expected to contribute to profits.The company still has a capacity growth in the long term. The announcement shows that the construction in progress includes the reconstruction of a 4500t / d clinker production line in Tianshui, Gansu.The initial 120 clinker production line is expected to be put into production this year and next.In addition, the company reorganized other related businesses for common development, and adopted a cement kiln to co-process urban domestic waste. It strived to transform and complete 2-3 cement kiln co-processing hazardous waste production lines during the “13th Five-Year Plan” period, and vigorously developed aggregates.Wall and other industries, profit growth space is expected to open. Investment suggestion: The company is expected to benefit from the volume and price resonance of cement this year, and its performance is expected to stabilize and improve; in the long run, new business capacity release, cement kiln co-processing and aggregate and other businesses are expected to become new growth points.Due to the increase in cement sales and the implementation of new financial instrument regulations, revenue for the 19-20 period was 67.28, 73.06 billion to 67.85, 74.3.7 billion, net profit attributable to mothers from 8.54, 9.55 trillion is raised to 10.11, 10.96 ppm, corresponding to a PE of 7X and 6X in 19-20 years, maintain the “Buy” rating. Risk warning: The infrastructure projects in the Ganqing area are worse than expected, and the price of cement has fallen sharply.