\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 585 Anhui Conch Cement Company Limited(600585) )
Anhui Conch Cement Company Limited(600585) 2021 achieved operating revenue of RMB 169979 billion respectively, with a year-on-year decrease of 4.73%; The net profit attributable to the parent company was 33.267 billion yuan, a year-on-year decrease of 5.38%, and the earnings per share was 6.28 yuan.
Comments:
The decrease of price increase and volume, the rise of coal price and the decline of other business income led to the decline of operating income and net profit. In 2021, the comprehensive price of cement and clinker of the company was 360.56 yuan / ton, with a year-on-year increase of 35.48 yuan / ton and an increase of 10.92%; The sales volume was only 304 million tons, a year-on-year decrease of 6.46%, which slightly increased the cement operating revenue by 3.75% year-on-year. The main reason is that the power restriction since the second half of 2021 led to the decline of production supply and sales volume, the shortage of cement supply and the rise in the price of power fuel coal. The shortage of coal supply has led to power rationing and a sharp rise in coal prices. In the case of low growth rate of cement operating income, the company’s other business income (trade income related to building materials) decreased by 30.26%, resulting in a year-on-year decline in the company’s operating income. With the rise of coal fuel price, the gross profit margin of cement in 2021 decreased by 3.83 percentage points year-on-year, and the cost of fuel and power per ton reached 113 yuan, an increase of 26 yuan year-on-year; The decline in sales volume also led to a year-on-year increase in the company’s unit depreciation, labor and other costs. The increase in costs led to a year-on-year decrease in the company’s net profit attributable to the parent company.
The cost advantage in scale expansion is expected to be further enhanced. As the leading company of cement, the company has outstanding cost advantages. In 2021, the cost per ton increased a lot under the circumstances of rising coal prices and declining sales volume, reaching 203.44 yuan, an increase of 3.72 yuan year-on-year. However, it remained at the lowest level among Xinjiang Tianshan Cement Co.Ltd(000877) , Tangshan Jidong Cement Co.Ltd(000401) , Guangdong Tapai Group Co.Ltd(002233) , Gansu Qilianshan Cement Group Co.Ltd(600720) and other cement listed companies, mainly due to the company’s advantages in scale, management and location of production line.
In 2021, under the condition of capacity control and high prosperity of the cement industry, the company still increased the cement clinker capacity by 7.2 million tons through self construction and operation (Hunan Yunfeng 4500t / D production line) and mergers and acquisitions (Guangdong Hongfeng, Guizhou xinshuanglong, Yunnan Tengyue, etc.), with a year-on-year increase of 3%, double the planned scale at the beginning of the year. In 2021, the company’s national production capacity accounted for 14.59%, an increase of 0.25 percentage points year-on-year. By the end of 2021, the company had sufficient monetary capital of 69.535 billion yuan, accounting for 30.16% of its assets. In 2022, the company plans to increase the production capacity of cement clinker by 4.6 million tons. According to the decline of industry prosperity, the abundance of monetary capital and the relationship between the company’s history and actual volume, it is expected to increase by more than 9.2 million tons, with a growth rate exceeding that of 2021. At present, the company’s Chizhou phase IV 10000t / D production line and Uzbekistan 3200t / D production line are under construction as planned, and the scale of the company will be expanded faster.
Earnings forecast and investment rating: we estimate that the company’s earnings per share from 2022 to 2024 will be 6.57 yuan, 7.26 yuan and 8.10 yuan, and the corresponding dynamic PE will be 5.62 times, 5.08 times and 4.55 times. Considering the company’s low-cost advantage, the expansion of scale will further reduce the cost, consolidate the company’s moat and maintain the company’s “strongly recommended” investment rating.
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