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　　 Changjiang Securities

　　 Baosteel The ex factory price policy of main products in December 2012 was announced, and the adjustment details of main varieties are as follows:

1. Hot rolling: low carbon steel, general structural steel, QSTE500TM increased by 100 yuan/ton, others remained unchanged.

2. Pickling: directly affiliated factory: unchanged; Meishan Iron and Steel Co., Ltd.: increase 80 yuan/ton.

3. General cooling: directly affiliated factory department: increase by 100 yuan/ton; Meishan Iron and Steel Co., Ltd.: 200 yuan/ton discount on the basis of the price of the factory directly under Meishan Iron and Steel Co., Ltd.

4. Hot galvanizing: directly under the factory headquarters: hot galvanizing of CQ grade, S series structural steel and pickled hot rolled base plate is increased by 80 yuan/ton, and others remain unchanged; Meigang products: increase by 120 yuan/ton.

5. Electrogalvanizing: remain unchanged.

6. Aluminum and zinc plating: directly affiliated factory headquarters: increase by 120 yuan/ton; Meigang products: 50 yuan/ton discount on the price of the factory directly under Meigang. 7. Non oriented silicon steel: B50A (H) 600, B50A700 increased by 50 yuan/ton, B50A (H) 800 and below increased by 150 yuan/ton, others remained unchanged.

Event comment:

In December, the ex factory price increased steadily due to cost pressure: the ex factory price adjustment trend of the three major steel prices has always been relatively consistent. When the ex factory price of mainstream products in Wuhan Iron and Steel Group Co., Ltd. was the first to increase slightly in December, the company's ex factory price selection in December was also expected to increase steadily: 1. After a month of rebound, the domestic steel price has stabilized since the middle of October, but the pattern of strength, strength, strength and weakness is obvious, Recently, the performance of plate is obviously better than that of long material; 2. The factory price of cold-rolled products of the company increased more than that of WISCO this time, mainly because the price of cold-rolled products remained unchanged in the early stage, which made its cost pressure relatively large. At the same time, the increase in the ex factory price of non oriented silicon steel, which is not obvious in the recent spot market, should also be caused by cost pressure; 3. Surprisingly, when the hot rolling in the spot market performed well and the hot rolling ex factory price of WISCO continued to rise, the company's hot rolling ex factory price remained stable, which may be related to the high difference between the company's hot rolling varieties and the market price. In general, the company raised the ex factory price of cold rolled products with poor market price performance under the overall pattern of relatively strong plates, more out of consideration of cost pressure.

The price difference between cold rolling and hot rolling has increased, but the price difference between cold rolling and market price has increased due to the increase of factory price of cold rolling products. The hot rolling price difference remains unchanged when the ex factory price remains unchanged, but the absolute value is still at a high position. In December, the cost pressure appeared, and the business performance in a single period declined slightly: although the ex factory price of some products increased in December, the cost pressure caused by the rebound of raw material prices in the earlier period began to appear, and the company's business performance in a single period is expected to decline slightly month on month. However, this calculation result will be affected by the final settlement price of raw materials, and the calculation considerations are also relatively simple, which can not fully simulate the changes in the actual business process, and may be different from the actual business data. It is estimated that the company's EPS in 2012 and 2013 will be 0.67 yuan and 0.38 yuan respectively, maintaining the "recommended" rating.

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