The performance is close to the middle of the early forecast.
Jinyu Group announced its 2020 results: revenue was 108 billion yuan, up 17.6% from the same period last year; net profit from home was 2.844 billion yuan,-23% from the same period last year, of which 4Q20 revenue was 36.17 billion yuan and net profit from home was 128 million yuan, which was lower than we expected, mainly because the asset impairment in the fourth quarter exceeded our expectations.
The main cement industry is making an upward profit. 1) Infrastructure support, sales are improving: as the construction of Xiongan New area greatly boosted demand in Beijing, Tianjin and Hebei, driving the company to get rid of the impact of the epidemic, the annual cement clinker sales reached 107 million tons (+ 11.3% compared with the same period last year). Among them, the fourth-quarter sales reached 30.51 million tons (a year-on-year increase of 37%, mainly due to the low base under the influence of last year's National Day and environmental protection policies). 2) the epidemic situation has been thwarted, and the price is under pressure: under the influence of the epidemic, the company's ton price is under pressure, the annual ton price is 287 yuan (year-on-year-28 yuan or-9%), but due to the drop in coal price-11 yuan to 189 yuan / ton, the gross profit per ton is-18 yuan.
The real estate and property sectors are under pressure from the epidemic, but the new building materials sector has turned around. 1) the company's real estate sector contributed 31.3 billion yuan (year-on-year + 41%) to the carry-over income in 2020. Due to the impact of the epidemic on commercial real estate sales prices and the increase in indemnificatory apartment's share, the gross profit margin was about-20ppt to 14% year-on-year, contributing to gross profit of 4.49 billion yuan (year-on-year). 2) the total investment property area of the property investment sector decreased slightly by 0.4% to 1.78 million square meters compared with the same period last year, contributing to a gross profit of 2.52 billion yuan (- 8.0% compared with the same period last year); 3) the new building materials and trade sector recorded a total profit of 10.77 million yuan, an increase of 1.16 billion yuan over the same period last year.
The operating cash flow is strong and the net debt ratio is slightly higher than the same period last year. In 2020, the company's operating cash flow was + 62.3% to 15.46 billion yuan (mainly due to the rebate of the company's real estate sales), and the net debt ratio was-31ppt to 93%.
Trend of development
Cement and property profits are expected to remain solid. 1) cement sector, looking forward to 2021, demand side: we expect that key projects around the country will release effective demand one after another, driving the company's cement sales to a new high; supply side: at present, peak production in various regions is good, inventory level is low, import impact will also be marginal weakening, optimistic about high price toughness upward. 2) in the real estate sector, the company guides that real estate carry-over income and gross profit margin in 2021 are expected to remain stable, and we expect the profit contribution of the real estate sector to increase slightly.
Profit forecast and valuation
Due to the reduction of the real estate gross margin assumption, we reduced 2021e EPS by 20% to 0.31 yuan, and introduced 2022e EPS 0.35 yuan. At present, it corresponds to A share 2020 0.3x/0.3x 21e 0.5x Universe 0.5xP Charpy B Magi H share 2020Universe 21e Pdeband B. Maintain the outperform industry rating, keep the target price of A / H shares unchanged, and correspond to A shares 2021122e 0.6x/0.6x Pamp B and H shares 2021/22e0.3x/0.3x Pamp B, and Adeband H 32% Universe 11% upside space.
Risk
The demand for key projects is lower than expected, and the carry-over of real estate is lower than expected.