The company released its quarterly report for 2022 on April 25. The company's revenue in the first quarter was 930 million yuan, an increase of 19.4%. The net profit returned to its mother was 2.8 million yuan, a decrease of 94.0%. Rising coal prices squeeze profits.
Support the main points of rating
In the first quarter, the company's revenue increased and the net profit decreased: the company's single-quarter revenue was 930 million yuan, up 19.4%; the net profit returned to its mother was 2.8 million yuan, down 94.0%. The cost increase caused by the rise in coal prices may be the main reason for the pressure on profits. The net cash flow of business activities totaled 510 million yuan, an increase of 110.6%, mainly due to the increase in the proportion of goods paid by the company through bills during the reporting period, resulting in a decrease in the amount of cash paid for goods and services.
Profits are under pressure and expenses are reduced: during the reporting period, the company's gross profit margin is 16.4%, which is the same as minus 9.0pct, down 4.1 pct from the previous month; the net profit rate is 0.2%, which is the same as minus 6.1pct and increasing 0.8pct month-on-month. The expense rate of the four items is 13.1%, which is the same as the decrease of 3.4pct, while the month-on-month decline of 2.3pct. Among them, the sales expense rate has changed greatly, with a year-on-year decrease of 3.4pct and a month-on-month decrease of 1.6pct.
The company announced major restructuring matters: on April 25, the company signed a "significant assets reorganization intention Agreement" with China Communications Construction and related parties, urban and rural areas of China. It is agreed that all the assets and liabilities of Qilianshan will be replaced with all the assets and liabilities of the Public Regulation Court, the first people's Court, the second people's Court held by China Communications and Construction Corporation, and the 100% equity interests of the Southwest Court, Northeast Court and Energy Institute held by China's urban and rural areas. The insufficient part of Qilian Mountain will be purchased from China Jiaojian and China's urban and rural areas by issuing shares. As the last piece of jigsaw puzzle for the integration of northwest cement in building materials, Qilian Mountain announced the reorganization after Ningxia building materials. If the deal is concluded, the company's main business will change.
Valuation
The company's performance is lower than expected, do not consider restructuring matters for the time being, considering the regional supply and demand pressure, we partially downgrade the profit forecast. It is estimated that from 2022 to 2024, the company's revenue will be 82.7,87.3 and 9 billion yuan respectively, the net profit will be 12.5,13.3 and 1.44 billion yuan respectively, and the EPS will be 1.61,1.72,1.86 yuan respectively, maintaining the company's buying rating.
Main risks faced by rating
Infrastructure, real estate investment growth is not as expected, Ningxia, Shaanxi cement impact, coal prices rise.