Key points of investment
In 2022, the company achieved total revenue of 34.544 billion yuan, a year-on-year decrease of 4.94%. The company's cement, clinker, hazardous solid waste disposal, aggregates and other products achieved revenue of 26.738 billion yuan, 2,703 billion yuan, 1,255 million yuan, 1,157 million yuan and 2,652 million yuan respectively, with year-on-year changes of -8.10%, -1.94%, -15.82%, +18.17%, +33.49%, respectively.
In terms of tonnage indicators, the average tonnage price of the company's cement and clinker in 2022 was 340 yuan, a year-on-year decrease of 24.50 yuan; the tonne cost was 272 yuan, an increase of 36.92 yuan over the previous year; and gross profit of tons was 67.82 yuan, a year-on-year decrease of 61.42 yuan.
In 2022, the company achieved a comprehensive gross profit margin of 20.48%, down 6.41 pct from last year, mainly due to low demand for cement in 2022 and throughout the year. The price of coal, the raw material, rose significantly. Against the backdrop of a sharp drop in cement volume and price and a two-way squeeze with high costs, industry profits fell by more than 60%. The gross margins of cement, clinker, hazardous waste disposal, aggregates and other products were 20.40%, 15.65%, 40.21%, 39.39%, and 9.17%, respectively, with year-on-year changes of -6.57pct, -6.95pct, -4.34pct, -5.67pct, and -1.00pct, respectively.
In 2022, the company achieved a net interest rate of 4.07%, down 7.44pct from last year; the cost rate for the period was 15.52%, +0.87% compared to the same period. The sales expense ratio was 1.51%, down 0.08 pct year on year, sales expenses -9.81% year on year; management expenses were 11.72%, up 0.75pct year on year, management expenses +1.55% year on year; R&D expenses were 0.33%, up 0.05 pct year on year, R&D expenses +13.29% year on year; financial expense ratio was 1.95%, up 0.15 pct year on year, and R&D expenses increased 13.29% year on year.
Asset impairment losses plus credit losses in 2022 were $50 million, down 55.01% from the same period last year.
The company's net operating cash flow in 2022 was 2,269 million yuan, a year-on-year decrease of 63.47%; net operating cash flow per share was 0.85 yuan, a decrease of 1.48 yuan/share over last year.
Profit forecasting and ratings: 1) Promote asset integration, enhance production capacity layout advantages, increase regional concentration, high market share and strong voice. In the Beijing-Tianjin-Hebei region, production capacity accounts for more than 50%; 2) Vigorously promote the construction of environmental protection projects, and the environmental protection industry has significant advantages. We adjusted the company's forecasted net profit for 2023-2025 to 1,587 billion yuan, 1,757 billion yuan, and 1,851 billion yuan respectively. The PE corresponding to the closing price on March 29 was 14.4 times, 13.0 times, and 12.4 times, respectively, maintaining the “increase in holdings” rating.
Risk warning: demand in the real estate infrastructure market is declining; capacity expansion falls short of expectations; macroeconomic fluctuations; prices of coal raw materials fluctuate greatly; repeated epidemics have prevented cement from leaving the factory under traffic restrictions.