The company released its mid-2022 report on August 19, with a revenue of 5.84 billion yuan in the first half, a decrease of 1.8%, a net profit of 490 million yuan, a decrease of 40.5%, and a net cash outflow of 82 million yuan from operating activities. Considering the recovery of regional prosperity, infrastructure development and real estate recovery in the second half of the year, the company's buying rating will be maintained.
Support the main points of rating
Q2 revenue slightly decreased compared with the same period last year, and the net profit returned to the mother was under pressure: the company's net profit in the first half of the year was 5.84 billion yuan, down 1.8%, and 490 million yuan, down 40.5%; the revenue in the second quarter was 3.11 billion yuan, down 4.1%; and the net profit was 280 million yuan, down 43.7%. In the second quarter, there was a net cash outflow of 82 million yuan from the company's operating activities, mainly due to the decline in cash received by the company in selling goods and providing services compared with the same period last year.
Weak regional demand suppresses industry prosperity: demand in Jiangxi Province is weak in the first half of the year. Due to the cumulative effect of real estate regulation and control, the area of new housing starts in the region has continued to decline since 2022. From April to June, the area of new housing construction under the ttm caliber decreased by 8.9%, 21% and 24.7% respectively, which decreased significantly, suppressing the demand for cement. The operating rate of Q2 regional mill remains low and the storage-capacity ratio remains at a high level.
Infrastructure continues to develop in the second half of the year, and the performance is flexible: since June, Jiangxi Province has made efforts in transportation and water conservancy, and projects have been taken as the starting point to stabilize growth. Under this influence, the regional cement boom has improved, the storage-capacity ratio has decreased, the operating rate has increased, the clinker price has increased for 4 consecutive weeks, the cement demand is expected to be supported by the infrastructure construction, and the company's performance is flexible in the second half of the year. It also helps the company to reduce energy consumption and achieve high-quality development.
Valuation
The company's performance was under pressure in the first half of the year, but in view of the fact that the continued efforts of infrastructure projects in Jiangxi Province made the company's performance flexible in the second half of the year, we partially adjusted our profit forecast. It is estimated that the company's income from 2022 to 2024 is 139.8 yuan, 148.1 yuan and 15.95 billion yuan, the return net profit is 12.6 yuan, 14.9 yuan and 1.68 billion yuan respectively, and the EPS is 1.58,1.86 yuan and 2.10 yuan respectively. Maintain the company's buy rating.
Main risks faced by rating
Coal prices continue to rise, infrastructure investment growth is not as fast as expected, and real estate starts remain sluggish.