Key points of investment
The company disclosed its 2023 semi-annual report, achieving operating income of 3.209 billion yuan, -9.49% year on year, net profit of 531 million yuan, -24.85% year on year, net profit of 386 million yuan after deducting net profit of 386 million yuan, -50.26% year on year, mainly due to falling product prices. Among them, revenue for the second quarter was 1,819 million yuan, -11.28% year-on-year, net profit of 359 million yuan, or -1.97% of the same period, net profit of 241 million yuan after deducting net profit of 241 million yuan, or -47.62% of the same period.
In the first half of 2023, the company achieved revenue of 3.209 billion yuan, -9.49% year-on-year. The decline in product prices was the main reason for the decline in operating income. By product, the company's clinker, cement, gravel aggregate, concrete, environmental disposal, real estate and other businesses achieved revenue of 6.69, 21.15, 2.19, 0.78, 1.13, 0.046, and 0.1 billion yuan respectively, with year-on-year changes of -8.80%, -3.07%, -41.57%, -25.19%, -12.20%, -32.51%, and -32.41%.
Cement is the main sales product, accounting for 65.92% of main revenue, an increase of 4.37 pct over the same period in 2022.
The year-on-year decline in revenue was mainly due to falling product sales prices.
Looking at the tonnage index, the company's unit price of cement clinker in the first half of 2023 was 279.24 yuan/ton, compared to -19.56% from the same period last year; the unit cost was 206.32 yuan/ton, compared to -12.87% compared to the same period last year; unit gross profit was 72.92 yuan/ton, compared to the same period last year, -33.92%.
Company expenses for the first half of 2023 accounted for 14.24% of total revenue, +4.93 percentage points from the same period last year. 1) The sales expense ratio was 2.13%, +0.38 percentage points year on year, mainly due to the increase in bagged cement sales, the year-on-year increase in packaging fees, and the development expenses of the sales business; 2) The management expenses rate was 9.38%, +2.05 percentage points from the previous year, mainly due to the addition of new production companies, an increase in total employee remuneration, an increase in the scale of assets such as fixed assets and intangible assets, and an increase in asset amortization; 3) The financial expense ratio was 0.61%, up +0.77 percentage points from the previous year, mainly due to the increase in long-term loan balances for new construction projects in the cement industry Caused ; 4) The R&D expenses rate was 2.12%, +1.74 percentage points over the previous year.
The company's balance ratio for the first half of 2023 was 48.33%, and at the end of the previous year it was 43.35%. Short-term loans were $2.125 billion ($1,609 million at the end of '22); projects under construction amounted to $1,231 million; at the end of 2022, it was $737 million, mainly for Shangfeng clinker and supporting production lines in Duyun, southwest China. The production line has basically been completed with the conditions for commissioning and commissioning.
The company's net cash flow for the first half of 2023 was +564 million yuan, compared to the same period last year - 91 million yuan, mainly due to a decline in operating profit; net cash flow from investment activities - 567 million yuan, compared to -719 million yuan for the same period last year; net cash flow from financing activities was 1,054 million yuan, compared to -672 million yuan for the same period last year, mainly due to long-term project financing. Net operating cash flow per share was +0.58 yuan/share, year-on-year -0.09 yuan/share.
Profit forecast: We adjusted our profit forecast and expected net profit of 9.83, 10.74, and 110 billion yuan for 2023-2025. Based on the stock price corresponding to the stock price on August 24, PE was 9.3, 8.5, and 8.3, respectively, maintaining the “increase in holdings” rating.
Risk warning: Demand in real estate and infrastructure markets is declining; international macroeconomic fluctuations; execution of false peak production is weaker than expected.