\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 585 Anhui Conch Cement Company Limited(600585) )
Event:
Anhui Conch Cement Company Limited(600585) released the annual report of 2021: in 2021, the company achieved an operating revenue of 167953 billion yuan, a year-on-year decrease of 4.73%; The net profit attributable to shareholders of listed companies was 33.267 billion yuan, a year-on-year decrease of 5.38%.
Key investment points:
The cost is well controlled and the profit is basically stable. During the reporting period, the company’s own products and trade sales of cement and clinker decreased by 6.53% and 18% respectively year-on-year. However, due to the overall high cement price throughout the year, the company achieved an operating revenue of 167953 billion yuan, a slight decrease of 4.73% year-on-year. The rise in cement prices mainly came from the rise in the price of upstream coal. The company’s annual net profit attributable to the parent company was 33.267 billion yuan, a year-on-year decrease of 5.38%. During the reporting period, the cost of the company was well controlled. Under the background of rising coal prices, the overall gross profit margin of the company was 29.63%, with a slight year-on-year increase of 0.47%, and the net profit margin was 20.34%, with a slight year-on-year decrease of 0.3%.
The supply and demand pattern is expected to continue to improve, and the new energy business will give birth to new growth space. In 2022, economic development will be “stable”, and infrastructure construction will be one of the important starting points of “stable growth”, which will stabilize the demand for cement. On the supply side, the peak shift production of cement is becoming stricter, and the requirements for capacity replacement and energy consumption are gradually increasing. The supply and demand pattern of the cement industry is expected to continue to improve, which is good for the leader Anhui Conch Cement Company Limited(600585) . The company acquired conch new energy and vigorously developed new energy business. According to the company’s announcement on March 9, 2022, the company will invest 5 billion yuan in developing new energy businesses such as photovoltaic power stations and energy storage projects to achieve full coverage of photovoltaic power generation in subordinate factories. It is expected that by the end of 2022, the installed capacity of photovoltaic power generation will reach 1GW and the annual power generation capacity will reach 1 billion kwh. With the gradual decline of photovoltaic power generation cost and the realization of parity, the company uses photovoltaic power generation to replace traditional electric energy, which can reduce the company’s cost, further improve the company’s profitability and promote the company’s transformation and upgrading.
Profit forecast and investment rating: we estimate that the company’s operating revenue from 2022 to 2024 will be 164124 billion yuan, 173583 billion yuan and 185099 billion yuan respectively, and the net profit attributable to the parent company will be 32.882 billion yuan, 35.516 billion yuan and 38.190 billion yuan respectively, corresponding to 5.94, 5.50 and 5.12 times of PE respectively, maintaining the “overweight” rating of the company.
Risk tip: coal prices continue to rise; Cement prices fell sharply; Shrinking demand for cement; The investment in infrastructure projects is less than expected; The negative impact of the epidemic on the economy has exceeded expectations.
