公司累计、单季收入均实现逆势增长，全球布局与产品结构化是主要原因：①24H1 公司海外水泥营收同比+55%，营收占水泥业务达41%；②“水泥+”产品销量提升且盈利能力表现优于国内水泥，24H1 骨料+混凝土营收同比+29.4%，营收占比42.5%、毛利占比57.9%。The company released its 2024 three-quarter report: 24Q1-Q3 achieved revenue of 24.719 billion yuan, +2.29% year over year, net profit to mother of 1.138 billion yuan, or -39.26% year-on-year, net profit of 1.063 billion yuan after deducting non-return to mother net profit of 1.063 billion yuan, or -41.69% year-on-year.
24Q3 achieved revenue of 8.482 billion yuan, +1.78% year-on-year, net profit of 0.408 billion yuan, or -40.17% year-on-year, after deducting non-net profit of 0.383 billion yuan, or -41.34% year-on-year. 24Q1-Q3's gross profit margin was 24.02%, YoY -2.28pct, net profit margin 6.39%, YoY -2.81 pct, of which Q3 gross profit margin was 24.74%, YoY -5.23pct, and -0.28pct month-on-month.
Supply and demand in the cement industry are weak and continue to be under pressure. The company's performance exceeds the industry average, and demand in the cement industry continues to decline markedly. The country invested 7.87 trillion yuan in real estate development in the first three quarters of 2024, -10.1% year-on-year, and the decline increased by 1 pct over the same period last year. The country's cumulative cement production in the first three quarters was 1.327 billion tons, or -10.7% year over year. Among them, the country's cement production in September was 0.168 billion tons, -10.3% year over year. The cumulative output in September and January-September all hit the lowest level in the same period since 2010. According to digital cement statistics, the cement shipment rate in September fell by about 9 pcts year on year.
The company's cumulative and quarterly revenue achieved contrarian growth. The global layout and product structuring were the main reasons: ① 24H1's overseas cement revenue was +55%, accounting for 41% of the cement business; ② “cement +” product sales increased and profitability performance was superior to domestic cement; 24H1 aggregate+concrete revenue was +29.4% year-on-year, accounting for 42.5% of revenue and 57.9% of gross profit.
Fee rates have risen and continue to be affected by foreign exchange
The 24Q1-Q3 company's cost ratio for the period was 13.69%, +1.14pct year on year, and the sales/management/R&D/finance expense ratios were 4.84%, 5.52%, 0.47%, and 2.86%, respectively, +0.25/+0.15/-0.22/+0.95pct year on year, respectively. Among them, 24Q3 financial expenses were 0.306 billion yuan, +41% month-on-month and +42% year-on-year. Other financial expenses after excluding interest charges in a single Q3 were 0.096 billion yuan (0.052 and 0.05 billion yuan for 23Q3 and 24Q2), which is expected to be related to changes in exchange rates.
Cash flow has basically stabilized, and the share of accounts receivable has increased
As of the end of Q3, the company's net operating cash flow was 3.382 billion yuan, -3.46% year-on-year, and remained stable. 24Q1-Q3's accounts receivable and notes were +35.32% year-on-year, accounting for 15.04% of revenue, of which accounts receivable were +38.81% year-on-year, accounting for 14.39% of revenue (10.60% in the same period in '23), which is expected to be related to the expansion of the concrete business (with many credit sales models).
Investment advice: Facing the future slowdown in domestic construction demand, Huaxin Cement has more choices and a firm path of transformation compared to its peers. We continue to be optimistic about the company's forward-looking layout in overseas, “cement +”, and low-carbon fields.
We expect the company's net profit to be 1.79, 2.05, and 2.25 billion yuan respectively in 2024-2026. The current price corresponds to PE of 15x, 13x, and 12x, maintaining the “recommended” rating.
Risk warning: Risk of infrastructure projects and real estate policies falling short of expectations, risk of fluctuations in raw material prices, risk of exchange rate fluctuations, risk of accounts receivable not being recovered in a timely manner.
