Key points of investment
The company disclosed its three-quarter report for 2023. The first three quarters of 2023 achieved operating income of 4.877 billion yuan, -5.54% year-on-year; realized net profit of 701 million yuan, -17.21% year-on-year, mainly due to the decline in main product prices, which affected revenue scale and profitability to varying degrees. Among them, the third quarter achieved revenue of 1,669 billion yuan, +3.09% year-on-year, net profit of 169 million yuan, +21.65% year-on-year, and net profit of 180 million yuan, minus net profit of 180 million yuan, -32.80% year-on-year.
Looking at the average price per ton, the company's average selling price of cement product units fell 16.59% year on year in the first three quarters of 2023, and the average sales price of clinker units fell 19.58% year on year, mainly due to the continued decline in the growth rate of real estate development investment across the country, the slow recovery in cement demand, and the overall weakening of cement prices. However, since entering the third quarter, cement prices have slowly increased month-on-month.
The company achieved a comprehensive gross profit margin of 27.79% in the first three quarters of 2023, a year-on-year ratio of -9.31pct. On a quarterly basis, the company's Q1, Q2, and Q3 gross margins were 26.35%, 32.43%, and 23.94% respectively, which were -14.68pct, -3.00pct, and -11.65pct, respectively, compared with the same period last year.
The company achieved a net sales profit margin of 14.45% in the first three quarters of 2023, a year on year -2.48pct. The equity investment business developed steadily and gradually contributed to the company's revenue; the period expenses were 635 million yuan, and the period expense ratio was 13.03%, +1.82 pct over the previous year. 1) The company's sales expense ratio was 2.12%, +0.26pct; 2) the management expense ratio was 7.86%, +1.11pct; 3) the R&D expense rate was 2.28%, y-0.35pct; 4) the financial expense ratio was 0.76%, +0.80pct; 5) the company's investment income and fair value change income in 2023 totaled 19,23218 million yuan, of which, Jinghe Integrated's fair value variable income was 146.2878 million yuan.
The company's net cash flow from operating activities in the first three quarters of 2023 was 796 million yuan, -23.26% year-on-year; net operating cash flow per share was 0.82 yuan, -0.25 yuan year-on-year. Judging from the revenue and cash payout ratio, the company's revenue and payment ratios for Q1-Q3 in 2023 were 104.7% and 109.2% respectively, with changes of -5.40pct and -6.10pct, respectively, compared with the same period last year.
Profit forecast: We have adjusted our profit forecast. The net profit for 2023-2025 is estimated at 855, 9.24, and 1,048 billion yuan. According to the stock price on October 31, the corresponding PE is 9.9, 9.2, and 8.1, respectively, maintaining the “increased holdings” rating.
Risk warning: declining demand in real estate and infrastructure markets; international macroeconomic fluctuations; large fluctuations in raw materials and fuel prices.