The company issues its 2022 half-yearly report. In the first half of 2022, the company realized revenue of 16.845 billion yuan (+ 3.24%), net profit of 1.141 billion yuan (- 7.08%) and non-return net profit of 1.067 billion yuan (- 9.74%). Among them, the company's revenue in the second quarter was 11.877 billion yuan (+ 5.86%), the net profit was 1.374 billion yuan (+ 7.41%), and the non-return net profit was 1.317 billion yuan (+ 5.60%).
Demand has declined, but less affected by the price war in the south, the performance remains resilient. In the first half of 2022, the company sold a total of 38.43 million tons of cement and clinker (- 19.94%), mainly due to recurrent epidemics and poor downstream demand. From the perspective of unit profitability, the company's average income per ton of cement and clinker is 364.96 yuan (+ 70.08 yuan). On the one hand, this price war is mainly in southern and eastern China, and cement enterprises in the north are less affected. the high price correction of cement prices since the power cut at the end of last year is not large, on the other hand, it is the cost support brought by high coal prices. The cost per ton is 281.11 yuan (+ 68.42 yuan), mainly due to the sharp rise in coal prices in the first half of the year, and the gross profit per ton is 83.85 yuan (+ 1.66 yuan), which shows the tenacity of the enterprise. In addition, the company completed the absorption and merger at the end of last year, the profit and loss of the minority shareholders of the company decreased significantly, and the net profit of the company returned to the mother decreased slightly in the first half of the year.
Demand is expected to improve in the second half of the year. The company's main production capacity is concentrated in Beijing, Tianjin, Hebei and surrounding areas, relatively little affected by the epidemic in Shanghai, and turned a loss into a profit in the second quarter. In terms of production line investment, in the first half of the year, the company completed the acquisition of Shanxi Fulong (72%), while Tongchuan Company, Panshi Company and Jiaozuo new material aggregate production line project construction was smooth. In the second half of the year, with the improvement of the epidemic and the recovery of infrastructure investment, as well as the supply disturbance caused by the power restriction policy, the company's performance is expected to return to growth.
Investment suggestion: as a leading cement enterprise in the north, the company has a high market share in its main sales areas, and its performance remained stable in the first half of the year under insufficient demand. With demand picking up in the second half of the year, the company's performance is also expected to return to growth. It is estimated that from 2022 to 2024, the company's revenue will be 373.15 yuan, 401.70 yuan and 42.933 billion yuan respectively, and the return net profit will be 28.34,31.40 and 3.372 billion yuan respectively, corresponding to 8.49,7.66 and 7.13 times PE respectively, maintaining the "buy" rating.
Risk tips: insufficient downstream demand, intensified competition in the industry, high coal prices.