\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 801 Huaxin Cement Co.Ltd(600801) )
Event overview. In 2021, the company achieved an operating revenue of 32.46 billion yuan, a year-on-year increase of + 10.6%, and a net profit attributable to the parent company of 5.36 billion yuan, a year-on-year increase of – 4.74%, corresponding to a Q4 revenue of 10.01 billion yuan, a year-on-year increase of 11.91%, and a net profit attributable to the parent company of 1.8 billion yuan, a year-on-year increase of + 12.08%. The company also announced that in 2022, it plans to sell 74.46 million tons of cement clinker, 78.22 million tons of aggregate and 18.07 million cubic meters of concrete.
Q4 industry has weak supply and demand and high price and cost. The company’s performance meets our expectations. In 2021q4, due to the weak energy consumption control and real estate construction, the cement industry as a whole showed a weak situation of both supply and demand. The net profit of the price increased significantly in the early stage of Q4, but the retreat range was also large after entering the off-season in the second half of December. At the same time, the coal price increased rapidly, eroding the profits of the industry. According to the annual report data, in 2021, the company’s cement sales volume was 70.14 million tons, with a year-on-year increase of – 1.7%, the selling price was 341 yuan / ton, with a year-on-year increase of + 13 yuan / ton, the cost per ton was 229 yuan / ton, the comparable caliber was + 26 yuan / ton, the gross profit per ton was 112 yuan / ton, and the comparable caliber was – 13 yuan / ton; It is estimated that the sales volume of Q4 decreased by more than 20% year-on-year, the price increased by more than 100 yuan / ton month on month compared with Q3, and the gross profit per ton increased by more than 40 yuan / ton month on month.
The strong growth of non cement business hedged the decline of cement business. In 2021, the company’s cement + business maintained high growth. According to the annual report data, in 2021, the company’s commercial mixing capacity was 43.8 million m3 (+ 16.7 million m3), aggregate capacity was 154 million tons (+ 99 million tons), concrete sales were 9.05 million tons, a year-on-year increase of + 96.3%, aggregate business sales were 34.97 million tons, a year-on-year increase of + 51.7%, while the gross profit margin of aggregate business remained at a high level of 65.6%, which hedged the decline of the company’s cement performance to a certain extent. In addition, in 2021, the company’s financial expenses decreased by 136 million yuan year-on-year, further smoothing the company’s profits.
2022 focus on the elasticity and aggregate business in Southwest China. We believe that the transmission of real estate from the bottom of policy to the bottom of fundamentals still needs time, and H1 cement demand and price pressure are still large. However, in terms of sub regions, the price in Southwest China still has certain advantages compared with the same period in 2021. At the same time, we note that the peak staggering production in Southwest China will be tightened in 2022. If it is well implemented, Southwest China is still expected to show price elasticity. In addition, according to the disclosure of the annual report, the aggregate production capacity of the company’s 10 aggregate projects will be expanded to 270 million tons after they are completed. In addition, according to the company’s 2022 plan, the aggregate and concrete business will continue to double. Due to the prominent aggregate resource barriers and high profit margin, we believe that the bone business is also expected to become a new driving force for the company’s growth.
Investment advice
Increase the cement price assumption and aggregate and concrete sales assumption, and correspondingly increase the revenue forecast for 2022 / 2023 to RMB 37.58/41.56 billion (Original: RMB 36.47/38.42 billion), but at the same time increase the cost assumption, and correspondingly reduce the return to parent net profit forecast for 2022 / 2023 to RMB 6.37/7.41 billion (original: RMB 7.86/8.35 billion) and EPS forecast to RMB 3.04/3.53 (Original: RMB 3.32/3.75). It is estimated that the revenue in 2024 will be 45.68 billion yuan, and the net profit attributable to the parent company will be 8.38 billion yuan. From 2022 to 2024, EPS 3.5 billion yuan 04 / 3.53/4.00 yuan, corresponding to the closing price of 19.3 yuan on March 30, 6.36/5.46/4.83xpe. Give 8xpe to the company in 2022, correspondingly reduce the target price to 24.32 yuan (Original: 29.88 yuan), and maintain the “buy” rating.
Risk tips
The demand is lower than expected, the cost is higher than expected, and there are systemic risks.
