\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 585 Anhui Conch Cement Company Limited(600585) )
The company issued the annual report of 2021. In 2021, the company achieved revenue of 167953 billion yuan (- 4.73%); The net profit attributable to the parent company was 33.267 billion yuan (- 5.38%), and the net profit not attributable to the parent company was 31.375 billion yuan (- 5.41%). In Q4 of 2021, the company realized a revenue of 46.242 billion yuan (- 11.51%), a net profit attributable to the parent company of 10.877 billion yuan (+ 4.48%), and a net profit not attributable to the parent company of 10.316 billion yuan (+ 5.72%).
The main business of cement operated steadily, and the price increase smoothly passed on the cost pressure brought by the rise in coal price. The gross profit per ton even increased slightly, and the speed of aggregate business increased significantly. In 2021, the company sold 304 million tons (- 6.53%) of cement and clinker products, with a sales revenue of 109610 billion yuan (+ 3.75%), an operating cost of 61.846 billion yuan (+ 11.30%), a ton revenue of 360.56 yuan (+ 35.48 yuan), a ton cost of 203.44 yuan (+ 32.47 yuan), and a ton gross profit of 157.12 yuan (+ 3.01 yuan). Affected by the annual coal price rise, the cost per ton of cement and clinker increased significantly. However, in the second half of the year, under the background of dual control of energy consumption, the cement price in many places in the South reached a historical high, and the annual ton income of the company increased significantly, which successfully passed on the cost pressure brought by the upstream coal price rise, and the ton gross profit even increased slightly year-on-year. In terms of other businesses, aggregate has the best performance. The annual aggregate revenue is 1.82 billion yuan (+ 77.50%), and the gross profit margin is still at a high level of 65.69%. The competition for aggregate mines in the post cement era is particularly important for cement enterprises, and we are optimistic about the company’s continued overweight in aggregate business.
The production capacity has increased, and the contribution to performance increment is limited under the background of large base. In 2021, the company added 7.2 million tons of clinker, 14.25 million tons of cement, 7.5 million tons of aggregate and 10.5 million cubic meters of commercial concrete through new construction and M & A. By the end of 2021, the company’s clinker production capacity was 269 million tons (+ 2.75%), cement production capacity was 384 million tons (+ 3.85%), aggregate production capacity was 65.8 million tons (+ 12.86%), and commercial concrete production capacity was 14.7 million cubic meters (+ 250.00%). The cement and clinker production capacity with large revenue accounts for a small year-on-year increase of only 2% – 4%. The aggregate and concrete production capacity has a large year-on-year increase, but the revenue accounts for a small proportion. Generally speaking, under the background of the company’s large base of cement and clinker production capacity, the contribution of new production capacity to the company’s performance is limited.
The dividend payment rate has increased significantly, which is optimistic about its role in boosting the stock price. In 2021, the company plans to distribute a cash dividend of 2.38 yuan (including tax) per share, with a corresponding dividend payment rate of 37.91%. Compared with the average dividend payment rate of 20162020 (31.06%, 40.11%, 30.04%, 31.55% and 31.98%). In addition, considering the policies of limiting new production capacity in the cement industry, the capital expenditure of the company’s main business will continue to decrease in the future, and there is a high probability that it will continue to increase the dividend payment rate to repay shareholders. After the cement industry enters the mature period, the volume and price are relatively stable, and the corresponding performance of cement enterprises is relatively stable. The DCF valuation model considering the dividend ratio may be more reasonable than the mainstream PE valuation system in the current market. In the DCF model, the increase of the dividend ratio has a more significant effect on the stock price. Optimistic about the stock price promotion effect brought by the increase of the company’s dividend payment rate in the future.
Vigorously layout the field of photovoltaic power generation, which has limited performance improvement in the short term and significant strategic significance in the long term. In 2021, the company completed the equity acquisition of conch new energy, adding 19 photovoltaic power stations and 3 energy storage power stations. At present, the company has an installed photovoltaic power generation capacity of 200MW. On the evening of March 8, it was announced that the company would invest 5 billion yuan this year to develop new energy business layout such as photovoltaic power stations and energy storage projects, so as to realize the full coverage of photovoltaic power generation in subordinate factories. It is estimated that by the end of 2022, the installed capacity of photovoltaic power generation of the company will reach 1GW, with an annual power generation capacity of 1 billion kwh. Considering the initial investment cost and operation and maintenance cost of the photovoltaic project, the current layout of the company’s photovoltaic power station has a relatively limited contribution to the overall performance of the company from the perspective of economic benefits, and the corresponding price savings and net profit contribution are about 100 million yuan. But in the long run, its strategic significance may be more significant: when the industrial power consumption is more market-oriented and the power price increases significantly, the company’s cost advantage of photovoltaic power generation will be reflected; In the context of carbon neutralization, enterprises using photovoltaic power generation may be more favored by policies. For example, cement enterprises using ordinary industrial power will have more off peak production time than cement enterprises using photovoltaic power generation; Under special circumstances, such as the dual control period of energy consumption at the end of 2021, enterprises with independent power generation capacity are expected to enjoy more production time and seize more market share. The company’s layout in the field of photovoltaic power generation is of great strategic significance, and its indirect economic benefits may be reflected in the long run.
Investment suggestion: as a global leading cement enterprise, the company has excellent cost control and management, and its business indicators are in the forefront of the industry. After the cement industry entered a stable and mature period, the company’s performance also tended to be stable and its growth was slightly insufficient. We are optimistic about the boosting effect of the company’s future dividend rate on the stock price and the company’s overweight layout in the field of aggregate and photovoltaic. It is estimated that the company’s revenue from 2022 to 2024 will be 158211 billion yuan, 164065 billion yuan and 168167 billion yuan respectively, and the net profit attributable to the parent company will be 33.346 billion yuan, 35.066 billion yuan and 37.131 billion yuan respectively, corresponding to 5.86, 5.57 and 5.26 times of PE respectively, maintaining the “overweight” rating.
Risk tip: infrastructure and real estate demand is lower than expected, industry competition intensifies, coal prices rise sharply, etc.
