\u3000\u30 Shenzhen Guohua Network Security Technology Co.Ltd(000004) 01 Tangshan Jidong Cement Co.Ltd(000401) )
Event: the company disclosed that in the first quarter report of 2022, Q1 achieved a total operating revenue of 4.968 billion yuan, a year-on-year increase of – 2.5%, a net profit attributable to the parent of – 233 million yuan, a year-on-year increase of 182 million yuan, slightly lower than our expectation.
Q1 revenue was – 2.5% year-on-year, and the gross profit margin was – 3.5pct year-on-year with the same caliber. It is expected that the price of cement business will rise, but the cost is under pressure. (1) Q1’s revenue side fell slightly year-on-year, which is expected to be mainly due to the year-on-year increase in the average sales price of cement and clinker, partially offsetting the decline in sales. According to the digital cement network, the average price of Q1 high-standard cement in Beijing Tianjin Hebei region, the company’s core market, increased by 112 yuan year-on-year, but the cement output in Q1 region decreased by 12% year-on-year. In addition, the Northeast market of the company’s capacity layout was also seriously affected by the epidemic, resulting in lower Q1 sales than previously expected. (2) The gross profit margin of Q1 was 20.6%, with a year-on-year decrease of -3.5pct in the same caliber. The decrease was mainly due to the impact of the sharp rise of coal price per ton and the impact of the increase of average price per ton on the denominator.
The expenses are properly controlled, and the expense rate is basically the same during the period. During Q1, the expense rate of the company decreased by 0.1pct to 24.0% year-on-year with the same caliber, which is still relatively stable against the background of the decline of the revenue side. Among them, the sales / management / R & D / financial expense rates were – 0.1 / + 0.1 / – 0.1pct year-on-year with the same caliber respectively, reflecting the proper cost control and the steady improvement of operating efficiency.
Operating cash flow declined, capital expenditure continued to grow, and the debt ratio decreased significantly year-on-year. The company’s net cash flow from Q1 operating activities decreased by 267.3% year-on-year to -699 million yuan. In addition to the decline in profits, it is related to the decline in its cash to income ratio. In Q1, the cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets was 565 million yuan, a year-on-year increase of 34.8%, reflecting the strengthening of energy-saving and consumption reduction technological transformation and industrial chain extension. The company’s asset liability ratio in the first quarter report of 2022 was 44.5%, down 5.4pct year-on-year, mainly due to the completion of supporting financing for asset restructuring. The balance of interest bearing debt was 15.989 billion yuan, down 51 million yuan year-on-year.
Q1 may be the low point of the annual boom, and the subsequent boom is expected to improve quarter by quarter. At present, the regional cement price remains relatively high since 2021q4, but Q1 is facing the impact of the epidemic and the pressure test of rising coal prices again. In the short term, if the epidemic control is eased and the new key projects contribute to the physical demand, the regional delivery rate is expected to improve significantly. In the medium term, the pan Beijing Tianjin Hebei market will benefit from the construction of xiong’an new area and Beijing Sub Center, and the annual demand is still supported. Under the influence of the epidemic, it will be more concentrated in the release in the third and fourth quarters. At that time, the marginal improvement of supply and demand will be more obvious, and the price center is expected to move up, promoting the year-on-year growth and recovery of quarterly profits.
Profit forecast and investment rating: (1) the expectation of steady growth continues to rise, the self-discipline on the supply side is strengthened, and the prosperity and valuation of the cement sector are expected to rise. (2) In the long run, the pan Beijing Tianjin Hebei regional pattern has been significantly optimized, gradually forming a large market with high concentration, and the price and profit curve will rise to a high level and fluctuate in a narrow range. (3) We expect the net profit attributable to the parent company in 20222024 to be 4.25 billion yuan, 4.89 billion yuan and 5.24 billion yuan respectively, corresponding to EPS of 1.60/1.84/1.97 yuan in 20222024. The current market value corresponds to PE of 7.7/6.7/6.2 times P / E ratio in 20222024. The company is rated as “overweight” for the first time.
Risk warning: the real estate credit risk is out of control, the epidemic situation exceeds expectations, and the competition and cooperation attitude of the industry deteriorates.
