Baoshan Iron & Steel Co.,Ltd. 1Q15 Results · 2019-12-25 · 1Q15 Results. Disclaimer The following...

April 2015

Baoshan Iron & Steel Co.,Ltd.1Q15 Results

Disclaimer

The following presentation distributed herewith includes forward-looking 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 forward-looking statements.

Baosteel’s actual results or developments may differ materially from those indicated by these forward-looking 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.

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1Q Results1Q Results1Q Results1Q Results

Industry Dynamics

Contents

Unit 1Q15 QoQ YoYCrude Steel Output million tons 5.57 ↑ 9.7% ↓ 1.4%

Sales Volume million tons 5.24 -- ↓ 5.5%

Total Operating Income billion RMB 41.47 ↓ 5.5% ↓ 11.5%

Operating Cost billion RMB 36.62 ↓ 7.4% ↓ 13.3%

Gross Profit billion RMB 4.78 ↑ 11.9% ↑ 4.9%

Gross Margin % 11.5 ↑ 1.8 ppts ↑ 1.8 ppts

Total Profit billion RMB 2.20 ↑ 65.3% ↑ 4.0%

Net CFO billion RMB 5.08 ↓ 16.4% ↑ 1326.2%

EPS RMB/share 0.09 ↑ 80.0% ↑ 2.5%

BVPS RMB/share 7.06 ↑ 1.7% ↑ 3.8%

Weighted ROE % 1.34 ↑ 0.65 ppts ↓ 0.02 ppts

Leverage % 45.6 ↓ 0.05 ppts ↓ 1.96 ppts

Operation OverviewOperation OverviewOperation OverviewOperation Overview

Unit: Unit: Unit: Unit:

million tonsmillion tonsmillion tonsmillion tons

1Q151Q151Q151Q15 QoQQoQQoQQoQ YoYYoYYoYYoY

OutputOutputOutputOutput 5.57 ↑ 9.7% ↓ 1.4%

5.655.07

5.57

2014一季度 2014四季度 2015一季度

Crude Steel OutputCrude Steel OutputCrude Steel OutputCrude Steel Output

1Q14 4Q14 1Q15

Unit:Unit:Unit:Unit:

million tonsmillion tonsmillion tonsmillion tons


SalesSalesSalesSales 5.24 0.0% ↓ 5.5%

Including:Including:Including:Including:

exportexportexportexport

0.59 ↓ 5.9% ↑ 23.9%

234 192 227

5.545.24 5.24

2014一季度 2014四季度 2015一季度0.47 0.62 0.591Q14 4Q14 1Q15

Sales of Finished ProductsSales of Finished ProductsSales of Finished ProductsSales of Finished Products

HRCHRCHRCHRC 39%39%39%39%

CRCCRCCRCCRC 44%44%44%44%

OthersOthersOthersOthers 5%5%5%5%

TubeTubeTubeTube 7%7%7%7%

PlatePlatePlatePlate 5%5%5%5%

Sales BreakdownSales BreakdownSales BreakdownSales Breakdown


billion RMBbillion RMBbillion RMBbillion RMB


IncomeIncomeIncomeIncome 41.5 ↓ 5.5% ↓ 11.5%

46.843.9

41.5

2014一季度 2014四季度 2015一季度1Q14 4Q14 1Q15

Total Operating IncomeTotal Operating IncomeTotal Operating IncomeTotal Operating Income

Unit:Unit:Unit:Unit:



CostCostCostCost 36.6 ↓ 7.4% ↓ 13.3%

42.239.6

36.6

2014一季度 2014四季度 2015一季度1Q14 4Q14 1Q15

Operating CostOperating CostOperating CostOperating Cost




Gross ProfitGross ProfitGross ProfitGross Profit 4.8 ↑ 11.9% ↑ 4.9%

Gross MarginGross MarginGross MarginGross Margin 11.5% ↑ 1.8ppts ↑ 1.8ppts

4.64.3

4.8

9.7% 9.7%

11.5%

2014一季度 2014四季度 2015一季度1Q14 4Q14 1Q15

Gross ProfitGross ProfitGross ProfitGross Profit

Gross Margin by ProductGross Margin by ProductGross Margin by ProductGross Margin by Product

HRCHRCHRCHRC

OthersOthersOthersOthers

TubeTubeTubeTube

PlatePlatePlatePlate

CRCCRCCRCCRC

14.9%

16.9%

14.3%

18.7%

1.8%

-0.3%

14.6%

0.1%

-13.9%

-2.7%■ 1Q14

■ 1Q15



RevenueRevenueRevenueRevenue YoYYoYYoYYoY GrossGrossGrossGross

MarginMarginMarginMargin

YoYYoYYoYYoY

SteelSteelSteelSteel MakingMakingMakingMaking 26.4 ↓ 15.8% 12.4% ↑ 2.9 ppts

DistributionDistributionDistributionDistribution 36.5 ↓ 16.0% 3.2% ↑ 0.8 ppts

31.4

43.5

26.4

36.5

钢铁制造加工配送2014一季度 2015一季度

Revenue and Gross MarginRevenue and Gross MarginRevenue and Gross MarginRevenue and Gross Margin

----Steel BusinessSteel BusinessSteel BusinessSteel Business

1Q14 1Q15Steel making Distribution



RevenueRevenueRevenueRevenue YoYYoYYoYYoY Gross Gross Gross Gross

Margin Margin Margin Margin

YoYYoYYoYYoY

EEEE----commercecommercecommercecommerce 4.0 ↑ 73.7% 0.1% ↓ 0.3 ppts

ChemicalsChemicalsChemicalsChemicals 1.9 ↓ 27.8% 5.2% ↓ 4.3 ppts

ITITITIT 0.8 ↑ 5.4% 28.1% ↓ 3.6 ppts

FinanceFinanceFinanceFinance 0.2 ↓ 0.6% 53.1% ↓ 1.6 ppts

2.3 2.6

0.80.2

4.0

1.9

0.80.2

电子商务化工信息科技金融2014一季度 2015一季度

Revenue and Gross MarginRevenue and Gross MarginRevenue and Gross MarginRevenue and Gross Margin

----Diversified BusinessDiversified BusinessDiversified BusinessDiversified Business

1Q14 1Q15E-commerce Chemicals IT Finance

1.Best performance1.Best performance 2.Euro bond2.Euro bond 3.E-Commerce3.E-Commerce 4.Ouyeel4.Ouyeel

Trade volume 1.75mn tons, up 156% YoY；Sales RMB 5.4bn, up 99% YoY

Baosteel：Total profit up 65% QoQ；up 4% YoYIndustry：Loss RMB 3.4bn, while profit was positive in 4Q14;loss was larger than 1Q14

Acquired the highest credit rating in the global steel industry；Successfully issued €500mn bond, coupon 1.625%；Among the first Chinese corporate euro bond issuers

Jointly found Ouyeel Commerce Co.,Ltd. with Baosteel Group；Integrate resources of E-commerce, distribution, technical & financial service, settlement and big data

HighlightsHighlightsHighlightsHighlights

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1Q15 Results

Industry DynamicsIndustry DynamicsIndustry DynamicsIndustry Dynamics

Contents

GDP CPI

• GDP up 7.0% in 1Q, economy growth continued to slow down.

• GDP growth targets at 7.0% in 2015, structure optimization is still the top priority.

• CPI up 1.2% in 1Q.

• CPI growth targets at 3.0% in 2015.

• Prudent monetary policy will continue.

9.5%

7.7% 7.7% 7.4%7.0%

2011 2012 2013 2014 2015一季度

5.4%

2.6% 2.6%2.0%

1.2%

2011 2012 2013 2014 2015一季度

Macro EconomyMacro EconomyMacro EconomyMacro Economy

1Q20151Q2015 Data source: National Bureau of Statistics

Unit: million tons 1Q151Q151Q151Q15 YoYYoYYoYYoY

Output 200 ↓ 1.3%

Net export 17 ↑ 19.0%

Apparent consumption 183 ↓ 2.8%

• Crude steel output was 200mn tons in 1Q, down 1.3% YoY.• Crude steel output growth slowed down, while export maintained high position, leaving apparent consumption a negative growth.

816 823200

765 739183

2013 2014 2015一季度粗钢产量表观消费

Demand and Supply AnalysisDemand and Supply AnalysisDemand and Supply AnalysisDemand and Supply Analysis----SupplySupplySupplySupply

Crude Steel Output and Apparent Consumption

1Q2015Crude steel output Apparent consumption

Data source: National Bureau of Statistics, Customs Statistics

-2.0%

-2.1%

-5.9%

• Steel industry FAI was RMB 67.1bn in 1Q, down 5.4% YoY.506.0 478.9

67.1-2.1%

-5.9% -5.4%2013 2014 2015一季度

黑色金属行业FAI 累计同比

Demand and Supply AnalysisDemand and Supply AnalysisDemand and Supply AnalysisDemand and Supply Analysis----SupplySupplySupplySupply

Steel Industry FAIUnit: billion RMB

Data source: Wind1Q2015Steel industry FAI Ytd, YoY

• In 1Q, China exported 25.78mn tons(+40.7% YoY); imported 3.23mn tons(-10.0% YoY). Net export were 22.54mn tons, up 53% YoY.

• Average export price was USD 653/ton, down 17.7 % YoY.

48.26

79.35

22.5514.7%64.4% 53.0%

2013 2014 2015一季度净出口同比

Demand and Supply AnalysisDemand and Supply AnalysisDemand and Supply AnalysisDemand and Supply Analysis----Import & ExportImport & ExportImport & ExportImport & Export

Net Export of Steel ProductsUnit: million tons

1Q2015Net export YoYData source: Custom Statistics

FAIFAIFAIFAI

20.6%19.6%

15.7%

• FAI totaled RMB 7.8 trillion in 1Q, up 13.5% YoY, growth continued to slow down.

4450

7.819.6%15.7% 13.5%

2013 2014 2015一季度

Demand and Supply AnalysisDemand and Supply AnalysisDemand and Supply AnalysisDemand and Supply Analysis

----Demand(infrastructure)Demand(infrastructure)Demand(infrastructure)Demand(infrastructure)

Unit: trillion RMB

Data source: Wind1Q2015

Investment New Start and Sales Growth

• Investment grew at 8.5% YoY in 1Q, growth rate in downward trend.• Large decrease in both new start and sales.• Large policies change are expected in 2015, including real estate registration, purchase and mortgage policies etc.

8.6 9.5

1.719.8%10.5% 8.5%

2013 2014 2015一季度

13.5

-10.7 -18.4

17.3

-7.6 -9.2

2013 2014 2015一季度房屋新开工商品房销售


----Demand(real estate)Demand(real estate)Demand(real estate)Demand(real estate)

Unit: trillion RMB

1Q2015 1Q2015Data source: WindNew start Sales

Output Sales

• Output and sales were 6.20, 6.15mn units, up 5.3% and 3.9% YoY respectively in 1Q, growth slowed down.

• Passenger car sales up 9.4% YoY, outperformed commercial car(down 19.4% YoY).

• We expect 2015 auto sales to grow at 6%, considering macro economy and auto purchase restriction.

22.12 23.72

6.2014.8%

7.3%5.3%

2013 2014 2015一季度

21.98 23.49

6.1513.9%

6.9%3.9%

2013 2014 2015一季度


----Demand(auto)Demand(auto)Demand(auto)Demand(auto)

Unit: million units Unit: million units

1Q2015 1Q2015Data source: CAAM

Washing Machine Refrigerator

Air-conditioner TV

72.02 71.1417.258.2%

-3.3%9.7%

2013 2014 2015一季度93.41 93.37

20.6810.6%-1.0% -3.3%2013 2014 2015一季度

143.3 157.238.611.6% 11.5%-1.5%2013 2014 2015一季度

140.3 155.433.3-0.2% 6.2% 7.5%

2013 2014 2015一季度


----Demand(home appliances)Demand(home appliances)Demand(home appliances)Demand(home appliances)Unit: million units Unit: million units

Unit: million units Unit: million units1Q2015 1Q2015

1Q2015 1Q2015Data source: Wind• Refrigerator and air-conditioner output growth decreased, while washing machine and TV grew fast in 1Q.• Consumption upgrade will continue, and industry development will be driven by structure upgrading.• Expected growth rate of white goods in 2015: 0-5% for washing machine and refrigerator, 8% for air-

conditioner.

-5%5%15%25%35%

2014年 14年4月 14年6月 14年8月 14年10月 14年12月 15年3月

通用设备制造业专用设备制造业电气机械及器材制造业铁路、船舶、航空航天等运输设备制造业


----Demand(machinery)Demand(machinery)Demand(machinery)Demand(machinery)

Value Added Growth, YoYGeneral EquipmentSpecial EquipmentElectrical EquipmentTransportation Equipment2014 Apr Jun Aug Oct Dec 2015 MarData source: National Bureau of Statistics

• Weak performance in 1Q, transportation equipment outperformed other sub-sectors.

• The industry was heavily influenced by the macro economy, new growth might not offset the negative impact of the contraction in traditional areas.

• Growth is expected stable in 2015, industry average 9.5%.

0200400600800

1-2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月2013 2014 2015


----Demand(ship building)Demand(ship building)Demand(ship building)Demand(ship building)

CompletionUnit: million tonnages

Jan-Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecData source: CANSI

• Completion, new order and carrying order were 9.47(+27.5% YoY), 5.99(-76.8% YoY) and 145(-2.5% YoY)mn tonnages respectively in 1Q.

• Due to the over-capacity in shipping market, freights are expected to remain low and demand still weak in 2015.

86420

数据来源：Mysteel05001000150020002500

14年1月 14年4月 14年7月 14年10月 15年1月 15年4月总量长材板材

1200140016001800

14年1月 14年4月 14年7月 14年10月 15年1月 15年4月

Steel InventorySteel InventorySteel InventorySteel Inventory

Social Inventory Steel Mills InventoryUnit: million tons Unit: million tons2520151050

18161412Total Long Products Flat ProductsData source: Mysteel Data source: CISA2014 Mar May Jul Sep Nov 2015 Apr 2014 Mar May Jul Sep Nov 2015 Apr

• Overall inventory level is lower in 2015, 13.94mn tons by 24 Apr, down 10% MoM and down 17% YoY.

• As transferred from social inventory, steel mills inventory was in upward trend, up 9% YoY and up 24% Ytd in early April.

456585105125145165

1月 2月 3月 5月 6月 7月 9月 10月 12月2013 2014 2015

50010001500200025003000

14年1月 14年3月 14年6月 14年8月 14年11月 15年1月 15年4月焦炭废钢

Raw MaterialRaw MaterialRaw MaterialRaw Material

Platts（62% Fe） Coke and Scrap PriceUnit: RMB/ton

Coke ScrapData source: WindJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Mar May Jul Sep Nov 2015 Apr • Imported iron ore 230mn tons in 1Q, up 2% YoY. Average import price USD 69.7/ton, down 46% YoY.

• Entering 2015, Platts still in downward trend. In early March, Platts dropped below USD 60/ton for the first time since 2009. Platts was USD 58.5/ton by 24 Apr, down 18% Ytd and down 48% YoY.

• Iron ore price is expected USD 50-70/ton in 2015.• Coke price is still in downward trend and expected to continue in 2015.

Iron Ore InventoryIron Ore InventoryIron Ore InventoryIron Ore Inventory

Port Inventory Unit: million tons

Data source: Mysteel020004000600080001000012000

14年1月 14年3月 14年5月 14年7月 14年9月 14年11月 15年1月 15年4月Total Australia Brazil India

120100806040200 2014 Mar May Jul Sep Nov 2015 Apr

• Growth slowed down recently, but remained high position in 1Q.

• 97.2mn tons by 24 Apr, down 3% Ytd and down 14% YoY.

200025003000350040004500

14年1月 14年3月 14年6月 14年8月 14年11月 15年1月 15年4月热轧3.0 冷轧1.0 螺纹钢HRB400HRC 3.0 CRC 1.0 Rebar HRB400

Steel MarketSteel MarketSteel MarketSteel Market

HRC, CRC and Rebar Price CRC Products PriceUnit: RMB/ton Unit: RMB/ton

Data source: Wind2014 Mar May Jul Sep Nov 2015 Apr 300040005000600070008000

14年1月 14年3月 14年5月 14年7月 14年9月 14年12月 15年2月 15年4月CRC 1.0 Galvanized 1.0 Prepainted 0.476 Silicon 6002014 Mar May Jul Sep Nov 2015 Apr• Due to weak downstream demand and losing support from raw material, steel price was depressed in 1Q.

• The sector lost money again in 1Q. According to CISA, Median-large sized steel mills’s proft was RMB -3.35bn.

Baoshan Iron & Steel Co.,Ltd. 1Q15 Results · 2019-12-25 · 1Q15 Results. Disclaimer The following...

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