\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 801 Huaxin Cement Co.Ltd(600801) )
The performance is in line with our expectations
On March 29, the company released its 2021 annual report. The annual revenue was 32.464 billion, a year-on-year increase of + 10.6%, and the net profit attributable to the parent company was 5.364 billion, a year-on-year increase of – 4.7%. After deduction, the net profit attributable to the parent company was 5.305 billion, a year-on-year increase of – 4.5%. Among them, the revenue in the fourth quarter was 10.01 billion yuan, a year-on-year increase of + 11.9%, the net profit attributable to the parent was 1.8 billion yuan, a year-on-year increase of + 12.1%, and the net profit attributable to the parent after deduction was 1.781 billion yuan, a year-on-year increase of + 14.6%. The annual net profit margin of sales was 17.88%, year-on-year -3.15pct, and the net profit margin of Q4 was 19.08%, year-on-year -0.4pct. The proportion of cement business income is lower than 80% (79%) for the first time, and other businesses grow rapidly and increase their proportion. According to the company’s budget, it is planned to achieve revenue of 37 billion yuan in 2022 (year-on-year + 14%).
Ton index performance: the price increased by 12.9 yuan year-on-year
In 2021, the average price of cement clinker per ton was 341.09 yuan (year-on-year + 12.9 yuan), the cost per ton was 229.02 yuan (year-on-year + 26.1 yuan, the freight in 2021 entered the operating cost, and the caliber in 2020 has been adjusted), and the gross profit per ton was 112.07 yuan (year-on-year -13.2 yuan). The cost per ton is 42.6 yuan (year-on-year – 2 yuan), including 17.7 yuan per ton of sales cost (year-on-year – 1.1 yuan), 21.7 yuan per ton of management cost (year-on-year + 0.6 yuan), 0.9 yuan per ton of R & D cost (year-on-year + 0.2 yuan), and 2.3 yuan per ton of financial cost (year-on-year – 1.8 yuan). The net profit per ton (after deduction of non parent) was 70.5 yuan, a year-on-year increase of -2.6 yuan, and the net profit per ton was 71.3 yuan, a year-on-year increase of -2.8 yuan.
Hubei’s sales volume recovered, and the proportion of “cement +” business increased: in terms of sales volume, the company sold 75.27 million tons of cement and clinker in 2021, a year-on-year increase of – 1%. From the perspective of the industry, the cement output of Hubei Province in 2021 was + 17.4% year-on-year (from – 13% in 2020, representing the local demand by output), Yunnan was – 11.9% year-on-year (from + 1.1% in 2020), Hunan was – 5.3% year-on-year (from – 1.4% in 2020), Chongqing was – 4.1% year-on-year (from – 3.7% in 2020), Sichuan was – 2.4% year-on-year (from + 2.3% in 2020), and Guizhou was – 13.6% year-on-year (from – 1.8% in 2020). The demand of Hubei Province recovered after the epidemic, but the demand of Yunnan and Guizhou was.
The aggregate has increased significantly and the resource layout is leading: the company plans to sell 78.22 million tons of aggregate in 2022. If the target is 100%, it is expected to double the growth rate. In 2021, aggregate contributed 2.054 billion yuan, accounting for about 6.4% as a whole and 4.06% in the same period of last year. In terms of production capacity, by the end of 2021, the aggregate production capacity was 154 million tons / year. During the reporting period, 12 aggregate lines such as Zhaotong, Chibi trading and investment phase II and Hefeng were put into operation, and 10 projects under construction such as Yangxin 100 million ton machine-made sand project were promoted. It is expected that the production capacity will reach 270 million tons after all of them are completed. Other products include: the sales volume of commercial concrete is 9.05 million m3, with a year-on-year increase of 96.49% (the production capacity is 43.8 million m3 / year), and the contribution income of concrete is 3.175 billion yuan, accounting for about 9.8% and 6.4% in the same period of last year; And the total disposal of environmental protection business was 3.28 million tons, a year-on-year increase of 11.6% (waste disposal was 5.53 million tons / year (including under construction), 540 million pieces of comprehensive environmental protection wall materials / year), etc.
Maintain high capital expenditure and focus on “series projects”: in 2022, the company plans to invest 12.2 billion yuan (14.5 billion yuan in 2021, with a final landing of about 7.2 billion yuan and 5.16 billion yuan in 2020), mainly in aggregate, overseas cement and integrated business. In 2022, it is planned to sell about 74.46 million tons of cement and commodity clinker (year-on-year – 1%), 18.07 million cubic meters of concrete (year-on-year + 100%), 78.22 million tons of aggregate and 3.94 million tons of environmental protection business. The budget realized a revenue of 37 billion yuan (year-on-year + 14%). The naming of series projects deserves attention. Among the projects under construction, Huaxin’s “integration series projects”, “aggregate series projects”, “Industrial Park Series projects”, “Environmental Engineering Series projects” and concrete and packaging series projects reflect the company’s integration and industrial park development plan.
The proportion of dividends remains stable: the ratio of cash dividends to net profit attributable to the parent company in 2021 is 39.1%, the current dividend rate is about 5.59%, the dividend rate from 2019 to 2020 is 40%, and the monetary capital at the end of the period is about 8.84 billion yuan.
Investment suggestion: we are optimistic about the fiscal overweight in 2022. There is no shortage of projects and funds for infrastructure construction. It is expected to hedge the downward pressure on the economy and pay attention to the ability to resist inflation. After the epidemic control, the cement demand in central and southwest China is expected to gradually recover. Centennial Huaxin is full of growth vitality and fosters growth opportunities in aggregate, environmental protection, concrete, overseas and other dimensions. The company successfully built a + H listing platform to provide financing guarantee for “going global” and “internationalization” and improve international popularity. We estimate that the net profit attributable to the parent company from 2022 to 2023 will be 6.38 billion and 7.18 billion respectively, and the dynamic PE corresponding to the closing price on March 29 will be 6 and 5x respectively, maintaining the “recommended” rating.
Risk warning: the project funds are not in place as expected; The weather changes are less than expected; The overseas investment environment is unstable.
