This report is read as follows:
The company released its quarterly report for 2022, which was lower than market expectations, weak demand, reduced investment income as a drag on performance, and maintained an "overweight" rating.
Main points of investment:
Maintain the "overweight" rating. The company announced its quarterly report for 2022, with revenue of 2.736 billion, up 0.96% from the same period last year, and net profit of 209 million, down 35.64% from the same period last year, lower than market expectations. Maintain the EPS forecast of 1.94,2.27,2.50 yuan from 2022 to 2024, and maintain the target price of 15.55 yuan.
Affected by the continued in-depth regulation and control of real estate, after the Spring Festival, there were more cold weather in Rain Water in Jiangxi Province and some cement sales areas of the company were affected by the COVID-19 epidemic, and the downstream construction recovered slowly. we estimate that the company's Q1 sales have dropped by about 16%. Slightly more than the 12% decline in the industry. We judge that the impact of the epidemic has gradually increased since April, and it is expected that Q2 sales may continue to maintain a downward trend.
The price increase was subdued by the rise on the cost side. We estimate that the average ex-factory price of Q1 of the company is 350 yuan / ton, an increase of 30 yuan / ton over the same period last year, but due to the impact of rising coal prices, the price increase is basically offset by the rising cost side, with a gross profit of 83 yuan per ton and a net profit of 43 yuan per ton, which is basically the same as the same period last year. Considering that 21Q2 profitability is affected by weak regional demand, which is the lowest in 21 years, cement prices in East China are expected to rise again in May with the relief of the epidemic, and the company's Q2 profit pressure is expected to be reduced compared with the same period last year.
Reduced return on investment is a drag on performance. Ningbo Dingfeng Mingdao Evergreen Investment Partnership (limited partnership), which the company withdrew from its investment at the end of 2021, led to a year-on-year decline in 22Q1 investment benefits of about 55 million. If the decline in investment income is excluded, the decline in the company's performance narrowed to about 20 per cent year-on-year.
Risk hint: the extension of the industrial chain is not up to expectations, and the upward risk of coal prices.
