\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 801 Huaxin Cement Co.Ltd(600801) )
Event Huaxin Cement Co.Ltd(600801) released the annual report of 2021, realizing an operating revenue of 32.464 billion yuan in 2021, with a year-on-year increase of 10.59%; The net profit attributable to the parent company was 5.364 billion yuan, a year-on-year decrease of 4.74%; The net profit attributable to the parent company after deducting non profits was 5.305 billion yuan, a year-on-year decrease of 4.48%.
The sales volume of the cement sector was stable, and the gross profit margin decreased. In 2021, the company achieved a revenue of cement products of 24.068 billion yuan, a year-on-year increase of 1.84%, and the gross profit margin was 33.84%, a year-on-year decrease of 5.31 percentage points; The concrete revenue was 3.175 billion yuan, with a year-on-year increase of 68.94% and a gross profit margin of 18.80%, a year-on-year decrease of 0.65 percentage points; The revenue of commodity clinker was 1.606 billion yuan, a year-on-year increase of 22.36%, and the gross profit margin was 18.19%, a year-on-year decrease of 13.05 percentage points. The company achieved a total sales volume of 75.27 million tons of cement and clinker, a year-on-year decrease of 0.96%; The sales volume of commercial concrete was 9.05 million m3, a year-on-year increase of 96.49%. Affected by the dual control of energy consumption and the rise of coal prices in the second half of 2021, the fuel cost of cement and clinker production of the company increased by 23.82% year-on-year, resulting in the decline of gross profit margin and net profit attributable to the parent company. Looking forward to 2022, under the background of the implementation of the steady growth policy, the growth of infrastructure investment demand and the relaxation of the marginal real estate policy, the demand of the cement industry is expected to remain high, and the infrastructure investment demand in the Central South and southwest regions of the company is expected to increase, helping the sales volume of the company’s cement sector to remain relatively stable.
Taking the lead in environmental protection technology, the company handled 3.28 million tons of environmental protection business in 2021, with a year-on-year increase of 11.56%. Under the background of carbon neutralization, green and low-carbon development has become a new development trend of cement industry. The company released the white paper on 20502060 dual carbon emission reduction path. The complete set of solid waste collaborative utilization technology of cement kiln has been applied in 20 factories in 7 provinces and cities, and the environmental protection business coverage of cement kiln line has reached 50%. In the case of stricter environmental protection requirements, the company is expected to take the lead through technical advantages and improve the market share in the region. It is estimated that the total disposal volume of the company’s environmental protection business will reach 3.94 million tons in 2022, with a year-on-year increase of about 20%.
Aggregate production capacity increased rapidly. In 2021, the company achieved aggregate business revenue of RMB 2.053 billion, with a year-on-year increase of 73.57% and gross profit margin of 65.62%, an increase of 3.03 percentage points. The sales volume of aggregate business was 34.97 million tons, with a year-on-year increase of 51.71%. The aggregate production capacity of the company is distributed in 7 provinces and cities. At present, the aggregate production capacity is 154 million tons / year. With the subsequent production of 10 aggregate projects under construction such as Yangxin 100 million tons of machine-made sand project, the aggregate production capacity of the company will reach 270 million tons / year, and the competitive advantage of the company’s aggregate business will be significantly improved.
With steady progress in international business, the company has achieved capacity expansion in 8 countries in Central Asia, Southeast Asia and Africa. By the end of 2021, the company’s overseas cement grinding capacity has reached 10.83 million tons / year. In 2021, the company’s overseas business revenue was 2.583 billion yuan, a year-on-year increase of 36.67%. With one belt, one road is expected to take part in some overseas cement assets, and the company will be developing steadily along with the national “one belt and one way” strategy.
Investment suggestion as a leading enterprise in the cement industry, the company has strong advantages in the integrated operation of aggregate, concrete, wall, environmental protection and other industrial chains with cement as the core. As a leader in central and southwest China, it is expected to benefit from the improvement of industry demand brought by the steady growth policy. It is estimated that the net profit attributable to the parent company in 22-24 years is RMB 6.291/72.37/8.316 billion, and the earnings per share in 22-24 years is RMB 3.00/3.45/3.97, with a year-on-year increase of 17.28% / 15.04% / 14.92%, and the corresponding P / E ratio is 6.43 times / 5.59 times / 4.87 times. Maintain a “recommended” rating.
The risk indicates that the demand of downstream application fields is lower than expected and the cost of raw materials remains high.
