\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 720 Gansu Qilianshan Cement Group Co.Ltd(600720) )
The company’s net profit attributable to the parent company in 21 years was 948 million yuan, a year-on-year decrease of 34.1%
The company released its annual report for 21 years. The annual revenue / net profit attributable to the parent company was 7.67/948 billion yuan, a year-on-year decrease of 1.78% / 34.1%, and the net profit deducted from non attributable to the parent company was 961 million yuan, a year-on-year decrease of 36.7%. Among them, Q4 achieved a revenue of 1.851 billion yuan in a single quarter, with a year-on-year increase of 3.10%. The net profit attributable to the parent company lost 6.03 million yuan, with a year-on-year loss of 4.5 million yuan. In the past 21 years, the capital construction projects in the company’s sales area were insufficient, the cement sales volume decreased year-on-year, and the coal price rose sharply, resulting in the year-on-year decline of the company’s performance.
Cement sales decreased slightly in the 21st year, and regional demand is expected to pick up under the force of steady growth
The company sold 23.54 million tons of cement and clinker in 21 years, with a slight year-on-year decrease of 1.1%. Affected by the rise of coal price, the ton cost increased by 28 yuan year-on-year to 215 yuan / ton. Affected by the impact of low-cost cement around the region, the average ton price of the company increased by only 6 yuan to 300 yuan / ton, and finally realized a gross profit of 85 yuan per ton, with a year-on-year decrease of 22 yuan / ton. The company’s sales area is mainly concentrated in Gansu. We expect that the cement demand in Gansu will still be guaranteed in 2022. According to the Gansu provincial government, the total investment of major projects planned in Gansu in 22 years will reach 1307.1 billion yuan, and the annual planned investment will reach 222.5 billion yuan, a year-on-year increase of + 18%, which is expected to fully boost the demand for water and mud. In 22 years, 68900 sets of urban shantytowns will be newly reconstructed and 10000 sets of indemnificatory housing will be built to further provide demand increment. We judge that under the background of strengthened peak shift shutdown and stricter dual control of energy consumption, the supply side may shrink further, and supply and demand are expected to be optimized in both directions. At present, the cement prices in Gansu / Tibet are higher than those in the same period last year. We judge that the coal cost pressure is expected to gradually slow down year-on-year, and the company’s profit may gradually improve.
The decline of gross profit margin in 21 years and the increase of expense rate led to the decline of net profit margin and good capital structure
In 21 years, the company’s overall gross profit margin was 27.6%, a year-on-year decrease of 7.8pct, of which the gross profit margin in Q4 was 20.5%, a month on month decrease of 5.0pct, but a year-on-year increase of 10.3pct; During the 21-year period, the expense rate was 9.8%, with a year-on-year increase of + 0.06 PCT, of which the sales / management expense rate was + 0.21 / – 0.15 PCT respectively. The increase in the sales expense rate was mainly due to the increase in the labor cost of salespeople, and the decrease in the management expense rate was mainly due to the year-on-year decrease in the labor cost disbursed from the management expense and the year-on-year decrease in the maintenance cost of fixed assets. Finally, the net profit attributable to the parent company was 12.4%, with a year-on-year decrease of 6pct. At the end of the period, the asset liability ratio was 21.95%, basically unchanged year-on-year, and the capital structure continued to maintain a good level.
Major shareholders increased their holdings, strengthened development confidence and maintained the “buy” rating
The company is the largest cement enterprise in Gansu Qinghai region, with a market share of 45% / 23% in Gansu / Qinghai respectively. We believe that the construction of key projects, shantytowns and affordable housing projects in Gansu in 2022 are expected to jointly boost the demand for cement, and the company may fully benefit. The company announced that the major shareholder of China building materials will increase its shares with its own funds, with an increase of no less than 120 million yuan and no more than 150 million yuan. This increase reflects the recognition of the major shareholder on the long-term investment value of the company and will lead the healthy and stable development of the company. Considering that the performance in 2021 was lower than expected, the net profit forecast for 22-23 years was lowered to RMB 1.09/1.19 billion (previous value: RMB 1.98/2.17 billion), and the 24-year forecast was added to RMB 1.28 billion. Referring to comparable companies, the company was approved to give the company 8 times PE in 22 years and the target price was RMB 11.20, maintaining the “buy” rating.
Risk tips: cement demand is less than expected, price rise in peak season is less than expected, coal cost rise, etc.
