Qilian Mountain (600720): Regional demand rebounded significantly, production capacity was released, and market share increased

Qilian Mountain (600720): Regional demand 夜来香体验网 rebounded significantly, production capacity was released, and market share increased
The company’s first-quarter earnings announcement is expected to achieve a net profit attributable to shareholders of listed companies of approximately 12.8 million in the first quarter of 2019.Net profit after deduction is about -4.3 million yuan.  Many factors contributed to the turnaround in the off-season.During the reporting period, the sales volume of the company’s products increased. According to the journal of the Gansu Ministry of Industry and Information Technology, from January to March, electricity consumption in the Gansu cement manufacturing industry2.8.9 billion kWh, an increase of 12 in ten years.59%, we expect the regional cement output and industry electricity consumption to basically match. As the regional leader, the company is expected to lead in production and sales.At the same time, due to the reduction of depreciation expenses, the shutdown costs during the “misaligned production” period were amortized in the year, and the product production costs in the reporting period decreased.And the implementation of the new financial instrument specifications, holding the relevant stone reloading stock fair value changes and asset disposal increased income.  The annual investment plan for major projects in Gansu Province increased by 21%.Gansu Province has set a target for the province’s fixed asset investment in 2019 to increase by about 6%. In 2019, the province will list 151 major projects with a total investment of USD 759.7 billion and an annual planned investment of 1340 trillion, which is 21% higher than the completed investment in 2018.Among them, there are 78 continuing projects with a total investment of USD 441.9 billion and an annual planned investment of 811.9 billion; 50 new projects are planned to start with a total investment of 256 billion and an annual planned investment of 43.6 billion; 23 preliminary projects with a total investment of 61.8 billion yuan.The planned investment is 850,000 yuan.Demand for cement in the region will pick up significantly as a result of investment.  The release of production capacity helped the market share increase.The company’s market covers the main cement consumer markets in Gansu, Qinghai and Tibet.The market shares in Gansu and Qinghai reached 42% and 24% respectively.The company’s Wushan rebuilt a 4500t / d new dry cement production line at the end of March, which was put into operation and produced an annual output of 139 clinker cement.5 Initial and 200 months, will further increase the company’s market share in the region.  The investment strategy predicts that the company’s EPS for 2019-2021 will be 1.06, 1.14 and 1.27 yuan, at current prices, the corresponding PE is 8.7, 8.1 and 7.3 times, giving the company a “Recommended” rating.  Risk reminders: 1. Infrastructure investment falls short of expectations 2. Coal prices rise sharply