\u3000\u3 China Vanke Co.Ltd(000002) 233 Guangdong Tapai Group Co.Ltd(002233) )
Event: the company released its annual report for 2021, and achieved an operating revenue of 7.71 billion yuan, an increase of 9.46% at the same time; The net profit attributable to the parent company was 1.84 billion yuan, an increase of 3.04% at the same time; Deduct the net profit not attributable to the parent company of RMB 1.6 billion, with a decrease of 1.66%. The company’s revenue increased by 2.47 billion yuan in the same quarter; The net profit attributable to the parent company was 520 million yuan, an increase of 29.56% at the same time; Deduct the net profit not attributable to the parent company of 460 million yuan, an increase of 21.04% at the same time. According to the first quarterly report of 2022, the company achieved a revenue of 1.26 billion yuan, a decrease of 16.37% at the same time; The net profit attributable to the parent company was 50 million yuan, with a decrease of 85.04%.
Fearless of rising costs, the price rise of 21q4 products boosted the annual profit: in 2021, the second-line production capacity of Wenfu 10000 ton line project of the company was fully released, with a clinker production capacity of 14.73 million tons and a cement production capacity of 22 million tons. However, due to the weakening of demand and the dual control of energy consumption, production and electricity in 2021q4, some production capacity is limited. Q4 alone sold 5.2 million tons of cement, a decrease of 25.7%, and 1.79 million tons of cement in the whole year, a slight increase of 3.0%. In 21 years, the selling price of cement tons of the company was 367 yuan, with an increase of 27 yuan; The cost per ton is 228 yuan, with an increase of 26 yuan; The gross profit per ton was 139 yuan, an increase of 2 yuan. Although the rise in coal and electricity prices pushed up the company’s cement manufacturing costs, the annual average gross profit per ton still increased due to the sharp rise in cement prices driven by regional production restrictions after September.
The slow release of downstream demand and the rise of superimposed costs put pressure on the performance of 22q1. In 2022q1, the company sold 3.48 million tons of cement, a year-on-year decrease of 25.4%. Mainly due to the weak regional real estate investment, more rain and cold weather in Guangdong after the Spring Festival and the impact of covid-19 epidemic in some sales areas of the company, the downstream construction recovery is slow and the cement demand is low. Affected by the rise in coal prices, the average cost of cement increased by 26.7% at the same time. Despite this support, the average selling price also increased by 10.2% year-on-year, but the increase was lower than the cost, and the comprehensive gross profit margin decreased by 8.9pct to 23.4%. In addition, with the decline of the stock index, the company’s securities investment suffered more floating losses, and the non recurring profit and loss in the first quarter decreased significantly year-on-year.
Regional demand is supported, and large-scale repurchase shows confidence in long-term development. The infrastructure sector accounts for a relatively high proportion of cement downstream demand in eastern Guangdong. Under the background of “steady growth”, relying on the strong financial strength of Guangdong Province, the overall demand is supported. In addition, in the long run, benefiting from the construction of Guangdong Hong Kong Macao Great Bay area, the performance need not be too pessimistic. On March 14, 2021, the company announced that it planned to use its own funds to repurchase its shares in the secondary market. As of March 13, 2022, the company has repurchased 21.85 million shares, accounting for 1.83% of the total share capital of the company, and paid a total amount of 236 million yuan (including transaction costs).
Profit forecast and valuation rating: considering the high fuel cost, we lowered the company’s EPS from 22 to 23 years to 1.60 yuan and 1.74 yuan (down 9.6% and 5.9% respectively compared with the last time), and gave the company’s EPS for 24 years to 1.82 yuan. It is optimistic that the regional cement demand has good support and continues to maintain the “buy” rating.
Risk warning: risk of demand decline; Price fluctuation risk of raw materials and coal; Downside risk of cement price; The risk of epidemic prevention and control was further tightened.
