\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 77 Xinjiang Tianshan Cement Co.Ltd(000877) )
Event:
Xinjiang Tianshan Cement Co.Ltd(000877) released the 2021 annual report: the operating revenue was 169979 billion yuan, an increase of 4.83% at the same time; The net profit attributable to the parent company was 12.53 billion yuan, a decrease of 3.53% at the same time; Deduct the net profit not attributable to the parent company of RMB 4.948 billion, an increase of 248.02% at the same time.
Key investment points:
After the reorganization, the company’s assets and production capacity increased significantly, the revenue increased by 4.83% and the profitability was basically stable. In 2021, due to major asset restructuring, the company’s asset scale and capacity scale increased significantly, and its operating performance increased significantly compared with that before restructuring and adjustment in the same period of last year. The company’s annual operating revenue was 169979 billion yuan, an increase of 4.83% over the same period after adjustment. The net profit attributable to the parent company increased significantly compared with that before restructuring and adjustment in the same period of last year, mainly due to the increase of non recurring profits and losses; At the same time, China’s coal prices rose significantly. The company reduced the coal consumption per ton of clinker through various ways, and the cost rise was relatively controllable. The annual net profit attributable to the parent company was 12.53 billion yuan, a slight decrease of 3.53% compared with the same period of last year.
After the reorganization, the company has become the world’s largest cement company and commercial mixed company, with a significant increase in scale effect and profitability. It will enter a stage of leapfrog development, and the dividend rate will not be less than 50% in the next three years. During the reporting period, the company acquired 100% equity of Zoomlion cement, 999274% equity of Nanfang cement, 957166% equity of Southwest cement and 100% equity of Sinoma cement to establish “new Tianshan cement” (under application for renaming). After the reorganization, the company has become the world’s largest cement company and commercial mixed company, and its asset scale and profitability have been significantly improved. The growth of net assets and net profit reached 694.25% and 858.41% respectively (based on the financial data of 2020), and the basic earnings per share increased by 20.13%. After the reorganization, the company, as the core enterprise in the cement sector of China Building Materials Group, will play a scale effect and distribute to the national market. It shows that the proportion of cash dividends promised by large companies in the future is less than 50% of that expected in the cement industry, which is one of the highest in the country.
Profit forecast and investment rating: after the completion of the company’s reorganization, the asset scale will increase significantly, the layout will be nationwide, and the synergy and scale advantages will be brought into play. It is expected that the profitability will be improved. At the same time. As the coal price returns to a reasonable range, the production cost may decline in 2022, further thickening the company’s profit. In addition, the dividend proportion of the company in the next three years shall not be less than 50%. We expect that the company’s revenue from 2022 to 2024 will be 165864 billion yuan, 174035 billion yuan and 181570 billion yuan respectively, and the net profit attributable to the parent company will be 12.936 billion yuan, 13.919 billion yuan and 14.814 billion yuan, corresponding to 9.15, 8.50 and 7.99 times of PE respectively. The company will be given a “buy” rating for the first time.
Risk tip: coal prices continue to rise; Cement prices continued to decline; Cement demand is lower than expected; The adjustment progress of the company’s internal structure is less than expected; The epidemic has repeatedly affected the economy.
