Anhui Conch Cement Company Limited(600585) (600585)
1、 Events
Recently, affected by Yankuang energy’s layout of new materials and new energy, the market pays more attention to the changes in the transformation and upgrading of traditional enterprises. We combed the investment performance of leading Anhui Conch Cement Company Limited(600585) (including the group) in the fields of energy conservation, emission reduction and new energy in 2021. It can be seen that the layout of conch in “wind and electricity” has been significantly accelerated, which has also laid an advantage for carbon emission reduction and carbon trading in advance.
2、 Comments
The layout of new energy is encouraged by policies, which is conducive to reducing carbon and saving electricity. The direct significance is to reduce costs and enhance competitiveness
On the premise of double carbon, energy conservation and emission reduction are directly linked to enterprise costs. On October 26, the State Council issued the action plan for carbon peak by 2030, which proposed to make use of wind energy, Cecep Solar Energy Co.Ltd(000591) and other renewable energy according to local conditions in promoting the carbon peak of the building materials industry. At the same time, as a high energy consuming industry, the trading price in the cement market is not limited by an upward movement of 20%.
① Reduce coal consumption: in 2020 Anhui Conch Cement Company Limited(600585) , a total of 34.64 million tons of coal will be consumed. This year, the cost pressure of rising coal prices has increased sharply. The peak coal price in October was 2592.5 yuan / T, mainly 500-600 yuan / T in previous years. Enterprises have sufficient power to reduce single ton coal consumption, which is usually realized by means of technological transformation, such as expansion of calciner capacity to improve coal combustion efficiency, upgrading of grate cooler equipment to improve heat recovery efficiency, In 2020, conch will expand the capacity of decomposing furnace of 24 clinker production lines and the technical transformation of grate cooler of 28 clinker production lines. The average standard coal consumption of clinker will be reduced by 3kg. In addition, the technologies being piloted include oxygen enriched combustion, etc.
② Reduce power consumption: in 2020, the total power consumption will be 14.47 billion kwh. Waste heat power generation is the standard configuration of conch factory, with a total installed capacity of 1263mw. The annual cumulative power generation will be 8.714 billion kwh, accounting for about 38% of the total power demand. It can also improve the operation efficiency of cement mill and reduce the process power consumption through technical transformation, such as the technical transformation of roller press. If the purchased power is replaced by photovoltaic and wind power, the power consumption cost will be reduced rapidly.
③ Green Power Investment: on December 4, 2021, Guangxi Xingan conch 18 MW photovoltaic power generation project was started. On December 3, Anhui Conch Cement Company Limited(600585) signed the cooperation framework agreement for Fengyang photovoltaic industrial park project. The planned projects include quartzite mine and deep processing, photovoltaic glass production, photovoltaic modules, Cecep Solar Energy Co.Ltd(000591) power generation, Huaihe River Wharf, etc. On November 13, Xuancheng municipal government, conch group and Huasheng new energy signed a strategic agreement around new energy industry investment and photovoltaic technology research. On October 29, Anhui Conch Cement Company Limited(600585) invested 2.3 billion yuan to implement the comprehensive development project of new materials and new energy of Yiyang conch. On September 17, conch group appointed Peng Shou, academician of the Chinese Academy of engineering, as its chief scientist (who won the “Oscar Award” for global glass). On August 30, Anhui Conch Cement Company Limited(600585) acquired 100% equity of conch new energy company for 443 million yuan.
④ Capital advantage + geographical advantage: abundant cash in hand, monetary capital of 63.5 billion yuan and trading financial assets of 26.3 billion yuan in the first three quarters; The integrated layout takes advantage of regional advantages. For example, Fengyang, Anhui Province is rich in quartz sand minerals, and the company’s factories are all over the country. There are not only wind rich fields (northwest), but also convenient for the implementation of distributed photovoltaic. In addition, cement peers also have the demand for carbon reduction, and the company will have more channels to sell surplus power in the future.
3、 Investment advice
We suggest that we attach importance to the infrastructure chain, and infrastructure investment is expected to play a “grasping” role to effectively hedge the downward pressure next year, especially Q1; Pay attention to the transformation and upgrading of old and new energy sources, and invest in green power leaders. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 35.17 billion, 35.86 billion and 35.97 billion respectively. The dynamic PE corresponding to the closing price on December 17 will be 6, 6 and 6x respectively. The valuation is lower than the historical median and maintains the “recommended” rating.
4、 Risk tips
China’s policy changes and changes in the international economic situation are less than expected; Weather changes are less than expected; The progress of green power investment is less than expected.
