This report is read as follows:
The company reported lower-than-expected results in 2021, supply price increases in the second half of 21 years are not enough to cover production losses, rising coal costs bring profitability pressure, medium-term cement demand recovery is expected to drive sales recovery.
Main points of investment:
Maintain the "overweight" rating. The company realized income of 7.673 billion yuan, down 1.78%, and returned to its mother with a net run of 948 million yuan, down 34.07%. Corresponding to 21Q4 income of 1.851 billion yuan, with an increase of 3.1%, the net profit of return to the mother is-6 million yuan, slightly lower than market expectations. The net profit of the company in 2022-24 is 11.3 / 14.0 (- 2.70) / 1.57 billion yuan, corresponding to eps1.46/1.81/2.02 yuan. Considering that the demand of Gansu and Qinghai is expected to start in 22Q2-Q3, the target price is maintained to 13.2 yuan.
21H2 supply-driven price increases are not enough to cover production losses. The company achieved 7.06 billion yuan in cement and clinker income in 2021, with a reduction of 0.88% and 2021H2, which still can not fully make up for the loss of the reduction. In terms of sales volume, 23.5365 million tons of cement and clinker were sold for the whole year, down 1.06% from the same period last year, of which Q1-Q4 sales grew by + 36%,-8%, + 2% and-6% respectively.
From the price point of view, the average price of cement and clinker tons in 2021 is 299 yuan, the same as the same period last year, but the price for the whole year is different from that in previous years. The price of key projects in Gansu and Qinghai is lower than that in the same period due to the shortage of funds. Q4 electricity is limited to 307 yuan / ton in the off-season, + 32 yuan / ton last year.
Coal costs have risen sharply, with full-year profits under pressure. It is estimated that the cost of cement and clinker tons in 2021 is 217 yuan, which is + 23 yuan compared with the same period last year, and the gross profit per ton is 83 yuan,-23 yuan compared with the same period last year. The sharp rise in costs is mainly due to the rapid rise in coal prices. It is estimated that the company currently consumes 150kg/ tons of standard coal per ton of cement, and earnings are highly sensitive to rising coal prices.
With steady growth, Gansu and Qinghai regional projects are expected to form actual cement demand in Q2-Q3. Looking forward to the cement demand of Northwest China in 2022, the construction of Northwest Gansu and Qinghai projects is better at the current time. It is expected that the actual cement demand will be in 22Q2-Q3, and the demand repair can be expected under the expectation of steady growth.
Risk hint: the domestic epidemic situation is repeated and the fluctuation of raw materials is higher than expected.