SHANGFENG CEMENT(000672):PRICES UNDER PRESSURE IN 3Q23;EARNINGS SHOW RESILIENCE
SHANGFENG CEMENT(000672):PRICES UNDER PRESSURE IN 3Q23;EARNINGS SHOW RESILIENCE
3Q23 results slightly miss our expectations
第三季度業績略低於預期我們的預期
Shangfeng Cement announced its 1-3Q23 results: Revenue fell 5.5% YoY to Rmb4.88bn, and attributable net profit dropped 17.2% YoY to Rmb701mn. In 3Q23, revenue rose 3.1% YoY to Rmb1.67bn, and attributable net profit grew 21.6% YoY to Rmb169mn. The firm's 3Q23 results slightly miss our expectations, mainly due to heavier-than-expected pressure on its per-tonne ASP and per-tonne earnings.
上豐水泥公佈了23財年第一季度業績：營收同比下降5.5%，至48.8億元人民幣，可歸屬淨利潤同比下降17.2%，至7.01億元人民幣。2013年第三季度營收同比增長3.1%，至人民幣16.7億元，歸屬淨利潤同比增長21.6%，至人民幣1.69億元。該公司23季度的業績略低於我們的預期，主要是由於其每噸ASP和每噸收益面臨比預期更大的壓力。
Sales volume continued to increase; revenue from main business ramped up steadily. Over January-September, the firm's cement and clinker sales volume rose 1.68mnt or 12% YoY to 15.84mnt, and its main business grew steadily as production and sales volume of its newly operated subsidiary in southwestern China increased.
銷售額持續增長，主營業務收入穩步增長。今年1-9月，該公司的水泥和熟料銷售量同比增長168萬噸，同比增長12%，達到1584萬噸，其主營業務穩步增長，原因是其在西南地區新運營的子公司中國的產銷量有所增加。
Expansion along the value chain for aggregate business well on track. Over January-September, sales volume of sand and gravel aggregate fell 2.05mnt YoY to 10.49mnt, which we attribute to weak market demand. In terms of environmental protection business, the firm's actual treatment volume over January-September was 210,400t, and its revenue rose 10.9% YoY to Rmb173mn.
沿著價值鏈進行擴張，使聚合業務順利步入正軌。1-9月，砂石骨料銷售量同比下降205萬噸，至1049萬噸，我們將其歸因於市場需求疲軟。在環保業務方面，該公司1-9月的實際處理量為21萬噸，收入同比增長10.9%，達到1.73億元人民幣。
Due to weak market demand and intense competition, the firm's cement prices have fallen sharply, and its earnings per tonne may remain higher than peers though under pressure. In 1-3Q23, the firm's cement ASP fell 16.59% YoY and its clinker ASP dropped 19.58% YoY. Data from Digital Cement shows that cement ASP in the Yangtze River Delta and southwestern China fell 16% and 12% QoQ in 3Q23. We think that the QoQ decline in price per tonne of the firm's cement products in 3Q23 may be larger than the decline in its cost per tonne to some degree. We estimate that its gross profit dropped QoQ to Rmb50-60/t in 3Q23 but was still higher than peers, indicating strong earnings resilience.
由於市場需求疲軟和競爭激烈，該公司的水泥價格大幅下降，儘管面臨壓力，但其每噸收益可能仍高於同行。在23年1-3季度，該公司的水泥ASP同比下降16.59%，熟料ASP同比下降19.58%。數碼水泥的數據顯示，長三角和西南中國地區的水泥均價在23季度環比分別下降了16%和12%。我們認為，該公司水泥產品第三季度每噸價格的季度降幅可能在某種程度上大於其每噸成本的降幅。我們估計，該公司第三季度毛利潤環比下降至50-60元人民幣/噸，但仍高於同行，顯示出強勁的盈利彈性。
Trends to watch
值得關注的趨勢
Cement prices in core regions recovering; main business to recover mildly. Data from Digital Cement shows that cement prices in the Yangtze River Delta and southwestern China have recovered in the past 2-3 weeks. Given rising coal prices, we expect the firm's gross profit per tonne to recover slightly in 4Q23. We expect the firm's main business to recover mildly in 2024, as the workload of physical infrastructure projects is likely to increase and market competition may stabilize.
核心地區水泥價格回升；主營業務溫和回升。數碼水泥的數據顯示，過去2-3周，長三角和西南中國的水泥價格有所回升。鑑於煤炭價格不斷上漲，我們預計該公司的每噸毛利將在23年第四季度略有回升。我們預計該公司的主營業務在2024年將溫和復甦，因為實體基礎設施專案的工作量可能會增加，市場競爭可能會穩定下來。
Value chain expansion to boost efficiency. Output and sales volume of the firm's aggregate fell YoY in 1-3Q23 due to weak demand, but we believe the firm will maintain sound profitability and stable earnings, given its strategy of steadily developing aggregate business on the back of its own cement mines. At present, the firm' co-treatment of cement kilns and construction of solar energy storage projects is well on track. We expect its gains from and efficiency of value chain expansion to improve.
拓展價值鏈，提高效率。由於需求疲軟，該公司總量的產量和銷售量在23-3季度同比下降，但我們相信，鑑於其依託自己的水泥礦穩步發展總量業務的戰略，該公司將保持良好的盈利能力和穩定的收益。目前，該公司的水泥窯共處理和太陽能儲存專案的建設進展順利。我們預計該公司從價值鏈擴張中獲得的收益和效率將有所提高。
Financials and valuation
財務和估值
As we lower our assumption on the firm's earnings per tonne, we cut our 2023 and 2024 attributable net profit forecasts 19.2% and 29.1% to Rmb850mn and Rmb910mn. The stock is trading at 10x 2023e and 9x 2024e P/E. We maintain an OUTPERFORM rating. Considering that the industry will likely recover moderately, we only cut our target price 10% to Rmb11.3, implying 13x 2023e and 12x 2024e P/E, offering 33% upside.
隨著我們下調對該公司每噸收益的預期，我們將2023年和2024年的可歸屬淨利潤預期分別下調19.2%和29.1%，至8.5億元人民幣和9.1億元人民幣。該股目前的交易價格為10倍2023倍和9倍2024倍本益比。我們維持表現優於大盤的評級。考慮到行業可能溫和復甦，我們僅將目標價下調10%至11.3元，意味著13倍2023E和12倍2024E的本益比，上漲33%。
Risks
風險
Disappointing demand recovery; sharper-than-expected cost expansion.
令人失望的需求復甦；高於預期的成本擴張。
譯文內容由第三人軟體翻譯。