The company's 21-year return net profit was 801 million yuan, down 17.0% from the same period last year. The company released its 21-year annual report. The annual income / return net profit for the whole year was 5.78 billion yuan, which was + 13.2%, respectively, compared with the same period last year. The non-return net profit was 734 million yuan, down 20.5% from the same period last year. Of this total, Q4 achieved an income of 1.637 billion yuan in a single quarter, an increase of 32.4% over the same period last year, and the net profit returned to its mother was 109 million yuan, down 24.1% from the same period last year. In the past 21 years, the company's cement sector has been greatly affected by the decline in demand, but the network logistics and transportation business revenue has increased compared with the same period last year, resulting in an increase in operating income compared with the same period last year. The rising cost brought about by the rise in raw coal prices has led to a decline in the company's net profit compared with the same period last year.

The sales volume of cement declined slightly in 21 years, and the intelligent logistics business grew rapidly. The company realized sales income of 4.89 billion yuan in the main industries related to cement in 21 years, a slight increase of 0.72% compared with the same period last year. The sales volume of cement and clinker in 21 years was 14.58 million tons, down 8% from the same period last year. The average price per ton rose 22 yuan to 279 yuan per ton compared with the same period last year. Affected by the rising coal price, the cost per ton rose 33 yuan to 205 yuan / ton, and finally realized a gross profit of 74 yuan per ton. It decreased by 11 yuan / ton compared with the same period last year. The sales area of the company is mainly concentrated in Ningxia and Inner Mongolia, with the effect of peak replacement in Mengxi appears gradually, the double control of energy consumption is becoming more and more strict, the pattern of regional supply and demand is optimized, and cement price is expected to get out of the depression. The company has achieved aggregate / concrete sales of 7.2 million tons / 196 million square meters in 21 years, and plans to produce and sell 13.5 million tons of cement, 9 million tons of aggregate and 2 million square meters of mixed production and sales in 2022. The main cement industry is expected to maintain steady growth. In 21 years, the company accelerated the development of intelligent logistics business, achieving revenue of 590 million yuan, a substantial increase of 2324% over the same period last year, and the proportion of total revenue to 10% is expected to continue to contribute to profit increment in 22 years.

The decline of gross profit margin in 21 years and the increase in expense rate led to a decline in net profit margin. The overall gross profit margin of the company for 21 years was 24.7%, a year-on-year decline of 8.1pct, of which the gross profit margin of building materials industry / logistics industry was 27.3% / 1.43%, respectively-6.2/-9.5pct. During the 21-year period, the expense rate is 7.4%, year-on-year + 0.5pct, in which the management / R & D / financial expense rate is respectively-0.1/+0.2/+0.4pct compared with the same period last year. The increase in R & D expense rate is mainly due to the increase in R & D project investment. The increase in financial expense rate is mainly due to the planning and deployment of funds to discount some bank acceptance bills to pay interest, which finally achieves a net interest rate of 13.9%, a year-on-year decline in 5pct. Profitability has declined. At the end of the period, the asset-liability ratio was 21.3%, a slight increase in 1.9pct compared with the same period last year, and the capital structure continued to maintain a good level.

Major shareholders increase their holdings to strengthen development confidence and maintain "buy" rating

The company is the largest cement enterprise in Ningxia, with a market share of nearly 50%. We believe that cement prices in Ningxia and Inner Mongolia are expected to gradually get out of the depression, the company's main cement industry is expected to maintain steady growth, and intelligent logistics business is expected to accelerate development. The company announced that China National Building Material, a major shareholder, will increase his holdings of the company with his own funds, with an increase of no less than 70 million yuan and no more than 100 million yuan. This increase reflects the major shareholders' recognition of the long-term investment value of the company. Taking into account the lower-than-expected results in 2021, the 22-23 net profit forecast was lowered to 890 million yuan (previous value: 1.33 billion yuan), and the 24-year forecast was increased by 1 billion yuan. With reference to comparable companies, the company was approved to give the company 8 times PE in 22 years, with a target price of 14.80 yuan, maintaining the "buy" rating.

Risk tips: cement demand is not as expected, peak season prices are not as expected, coal costs are rising, and so on.