According to the company's quarterly report for 2022, 2022Q3's revenue was 6.369 billion yuan, down 9.2%; the net profit returned to its mother was 200 million yuan, an increase of 3.0% SPS 0.16 yuan per share. Weak start-up data led to a decline in commercial concrete demand, but the company's order reserves are still sufficient. It is expected that the continued implementation of the regional strategy and the landing in cooperation with Anhui Conch Cement will further enhance the company's profitability. Maintain the company's buy rating.
Support the main points of rating
Q1-3 performance is stable, profitability and cost control ability have been enhanced: 2022Q1-3 company revenue of 18.204 billion yuan, a decrease of 6.1%; return to the mother net profit of 578 million yuan, an increase of 3.7%, the overall performance is relatively stable. The net operating cash flow of Q1-3 was-2.429 billion yuan, with a decrease of 38.3%, mainly due to the increase in cash payment by the company. Q3 company gross profit margin and net profit margin have increased, except for R & D expenses, the expense rate is the same or slightly lower than the same period last year, and the company's profitability and cost control ability continue to enhance.
Weak start-up data led to a decline in demand for commercial concrete, and the company's order reserve is still sufficient: the contract volume and sales volume of commercial concrete of 2022Q3 Company decreased by 0.4% and 10.5% respectively. We believe that the weak new construction data from January to August and the decline in commercial concrete demand are the important reasons for the decline in sales. However, the difference between the number of contractors and the number of sellers of Q3 company has increased by 10.9%, and the company's order reserve is still relatively sufficient.
The regional layering strategy continues to advance, and the company's profitability is expected to rise steadily: the proportion of commercial concrete provided by Western Construction to China Construction Group accounts for a low proportion of the total concrete needed by China Construction Group, and there is broad room for growth; the company's regional layering strategy continues to advance, and the expansion of the new regional business scale is expected to give full play to the scale effect and improve profitability. The introduction of strategic investor Anhui Conch Cement will give the company further advantages in raw material procurement, business development and logistics transportation.
Valuation
The company's overall performance is relatively robust, but considering that the start-up data is weak, we adjust our profit forecast slightly. It is estimated that the company's income from 2022 to 2024 is 275.1 yuan, 297.5 yuan and 33.61 billion yuan, the return net profit is 9.2 yuan, 11.7 yuan and 1.54 billion yuan respectively, and the EPS is 0.73,0.93,1.22 yuan respectively. Maintain the company's buy rating.
Main risks faced by rating
The landing of infrastructure is not as expected, the effect of business expansion is not as expected, and the effect of strategic cooperation is not as expected.