Anhui Conch Cement Company Limited(600585) (600585)
Through the T-type development strategy, the company has continuously reduced the costs of raw materials, transportation, fuel and electricity, realized that the comprehensive cost is lower than the industry average level, at the same time, the excellent operation ability has reduced the three fee level, so that the company has the core advantages of low cost and high profit.
Under the double carbon background, the cement industry is one of the industries with heavy emission reduction tasks. It continues to face the pressure of structural reform from the supply side, the industry supply continues to be limited, the industry prosperity continues to be maintained, which is good for the leading enterprises with scale advantages and technical advantages.
The concentration of the cement industry has increased significantly in recent years, and the voice and coordination ability of leading enterprises have been improved. At the same time, it has alleviated the past malicious competition situation, objectively raised the cement price, and finally benefited the leading enterprises.
In the context of mine resource utilization, the concentration of the whole cement industry chain has increased, the company has sufficient mine resources, and the conservative estimate of the actual value is about 50 billion yuan, which provides strong support for the company to extend the industrial chain, fully develop aggregate and gravel business, expand overseas business, and consolidate and strengthen the leading position in the industry.
As a leader in the cement industry, it has excellent corporate governance structure and good cost control. Based on East China, it expands its business at home and abroad. It is rich in mineral resources and abundant cash on hand. It is expected to further benefit under the background of shrinking supply, stricter environmental protection and industry adjustment. Using the relative valuation method, we predict that the company’s EPS from 2021 to 2023 will be 6.47 yuan, 6.96 yuan and 7.04 yuan respectively, and the corresponding PE will be 6.23x, 5.79x and 5.72x respectively. “Overweight” rating is given for the first time.
Risk tip: cement demand is less than expected; The promotion of capacity removal policy was less than expected; Cement prices continued to decline; The strength of capital construction is less than expected; Carbon trading is not progressing as expected; The epidemic situation has repeatedly affected the economy; The development model of foreign companies in China is not completely comparable, and the relevant data and materials are only for reference.
