Introduction to this report:
The company published its 2022 annual report and 2023 quarterly report, “two wings in one”. Investments in aggregates, environmental protection, and semiconductors gradually showed performance highlights and maintained the “increase in holdings” rating.
Key points of investment:
Maintain an “increase in holdings” rating. Revenue in 2022 was 7.135 billion, down 14.19% from the same period, and net profit returned to the mother was 949 million, down 56.38% from the same period. 2023Q1 achieved revenue of 1,390 million, a year-on-year decrease of 7.02%, and the net profit of the mother was 172 million, a decrease of 49.40% over the previous year, in line with market expectations. Considering the uncertain impact of real estate demand, we lowered the 2023-24 EPS forecast to 0.98, 1.22 (-0.74, -0.91), and added the 25-year EPS forecast by 1.54 yuan. Based on the 23-year average of comparable companies, the target price was lowered to 14.70 (-2.30) yuan.
Sales reflect growth and location advantages, leading the cement industry. Cement and clinker sales in 2022 were 19.328,200 tons, down 7.14% from the same period, better than the 10.5% decline in the industry. Meanwhile, in 2023Q1, we estimate that the company achieved a sharp increase in cement clinker sales of about 20% year-on-year, which still clearly outperformed the industry's 4.1% increase, highlighting the company's growth and location advantage.
In the context of the sharp rise in coal costs, excellent management capabilities have become a reality. The company achieved an average price of 308 yuan/ton of cement clinker throughout the year. The gross profit per ton remained high at 100 yuan/ton, and the net profit per ton was 38 yuan/ton, and still maintained first-class profitability in the industry. Among them, the average factory price of Q4 increased by 50 yuan/ton to 309 yuan/ton over the previous month, gross profit per ton was 75 yuan/ton, and net profit of tons was about 22 yuan/ton.
“Two wings in one”, investments in aggregates, environmental protection, and semiconductors are gradually showing performance highlights. It sold 16.12 million tons of aggregates in '22, an increase of 20.75%. The share of revenue has reached 10.16%. Aggregate production capacity has reached 18 million tons, and the subsequent company's target production capacity is over 30 million tons, which is basically in line with subsequent cement production capacity. At the same time, the beneficiary company's aggregate production capacity is mainly focused on East China. The company's aggregate gross margin is close to 80%, and its profitability clearly exceeds that of other listed cement companies.
Risk warning: Industrial chain extension falls short of expectations, risk of exchange rate fluctuations