\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 801 Huaxin Cement Co.Ltd(600801) )
The company released its annual report for 2021 on March 29, with annual revenue of 32.46 billion yuan, an increase of 10.6% at the same time; The net profit attributable to the parent company was 5.36 billion yuan, with a decrease of 4.7%; EPS2. 56 yuan. In the fourth quarter alone, the company’s revenue was 10.01 billion yuan, an increase of 11.9% and the net profit attributable to the parent company was 1.8 billion yuan, an increase of 12.1%. Under the integration strategy, the company’s non cement business continues to grow in large quantities.
Key points supporting rating
In the past 21 years, the company’s revenue increased steadily and the profit decreased slightly: the annual revenue of the company was 32.46 billion yuan, an increase of 10.6% at the same time; The net profit attributable to the parent company was 5.36 billion yuan, a decrease of 4.7%.
The main business of cement remained stable: in 2021, the company sold 75.26 million tons of cement and clinker, a decrease of 1.0% at the same time. We calculated that the price of cement and clinker in 2021 was 341.1 yuan, an increase of 3.9% at the same time, an increase of 12.9 yuan; The cost per ton was 229.1 yuan, an increase of 16.7% and an increase of 32.8 yuan; The gross profit per ton was 112.1 yuan, a decrease of 15.1% and 19.9 yuan. Affected by the dual control of energy consumption and the impact of the demand side, the company’s cement sales and profits fell to a certain extent.
High volume of non cement business: in 2021, the company’s high volume of non cement business achieved a sales revenue of 6.79 billion yuan, an increase of 53.9% and a profit of 2.64 billion yuan, an increase of 39.7%. Non cement business accounted for 20.9% of revenue, increased by 5.9pct at the same time, and accounted for 23.8% of profit, increased by 8.0pct at the same time.
Green transformation leads cost reduction and efficiency increase, and non cement business provides performance flexibility: the company actively explores a new path of green and low-carbon development, actively promotes automation transformation and the transformation of carbon reduction achievements through digital integration reform, or will continue to achieve cost reduction and efficiency increase. In 2022, the company plans to invest 12.2 billion yuan to deepen the integration strategy, and plans to sell 78.22 million tons of aggregate and 18.07 million cubic meters of concrete, an increase of 123.7% and 147.3% respectively compared with 21 years.
Valuation
Considering the current high cost and high price of cement and the production capacity of the company’s non cement business, we partially lowered our profit forecast. It is estimated that from 2022 to 2024, the company’s revenue will be 42.53 billion yuan, 46.35 billion yuan and 50.06 billion yuan respectively; The net profit attributable to the parent company was 6.54 billion yuan, 7.71 billion yuan and 8.37 billion yuan respectively; EPS was 3.12, 3.68 and 3.99 yuan, maintaining the company’s buy rating.
Main risks of rating
The production capacity was put in less than expected, the steady growth policy was less than expected, and the price of raw materials rose.