\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 77 Xinjiang Tianshan Cement Co.Ltd(000877) )
The net profit attributable to the parent company in 22q1 was 1.02 billion yuan, a year-on-year decrease of 23.39%
The company's revenue in 22q1 was 28.26 billion, a year-on-year decrease of 1.77%, and the net profit attributable to the parent company was 1.02 billion yuan, a year-on-year decrease of 23.39%. It is expected to be mainly affected by the decline of sales volume and the decline of profitability caused by the rise of coal price. We believe that the fundamentals of Q2 are expected to improve month on month. With the support of steady growth, the annual performance can still grow steadily. The company recently announced that it plans to acquire the holding rights and other assets of the related party Ningxia Building Materials Group Co.Ltd(600449) held subsidiaries of cement and other related businesses in cash. After the successful implementation, it will effectively solve the problem of horizontal competition between the company and Ningxia Building Materials Group Co.Ltd(600449) in the related businesses of cement sector and further promote the high-quality development of the company.
Q1 weak demand led to a decline in sales, and rising coal prices led to pressure on profits
The company's revenue declined slightly in the first quarter. We expect that it is mainly due to the decline in sales volume. According to the National Bureau of statistics, the national cement output fell by 12.1% year-on-year from January to March, which is mainly affected by the continuous and in-depth regulation of real estate, the continuous slowdown of real estate investment, and the recovery of demand in some areas after the festival is hindered by weather, epidemic and other factors. The average national cement shipment rate in the first quarter was 37%, down 9pct year-on-year, As of April 22, although it has recovered to 64%, it is still 23 PCT lower than that of the same period last year. East China is greatly affected by the epidemic, with a year-on-year decrease of 40 PCT. Supported by steady growth, we expect the decline in demand side to be controllable. The gross profit margin of Q1 company was 18.8%, with a year-on-year decrease of 4.2pct and a month on month decrease of 7.5pct. It is expected that the increase in ton cost is mainly due to the rise in coal price. At present, the average price of cement in China is 45 yuan higher than that in the same period of last year. In the regions where the peak shifting production in April has been implemented, the enterprises are under the pressure of rising costs, and the cement price is pushed up simultaneously; In the areas significantly affected by the epidemic, the market oversupply was serious, and the price fell slightly. We judge that after the follow-up epidemic situation improves, the demand will release or drive the price to rise rapidly, and the Q2 fundamentals are expected to improve month on month.
The cost side is optimized, and there are abundant monetary funds in hand
During the 22q1 period, the expense rate of the company was 12.4%, with a year-on-year decrease of -1.8pct, of which the expense rates of sales / management / R & D / finance were -0.8 / - 0.8 / + 0.3 / - 0.5pct respectively. The expense side was further optimized, and finally the net interest rate was 4.1%, with a year-on-year decrease of 1.5pct. The asset liability ratio at the end of the period was 67.5%, down 0.5pct from the end of the year 21. The net outflow of operating cash flow in 22q1 was 1.64 billion yuan, an increase of 960 million yuan year-on-year, mainly due to the decrease of cash to cash ratio. According to the calculation, the cash to cash ratio in Q1 was 97.5%, a year-on-year decrease of 6.0pct, but the overall cash on hand was still abundant. The balance of monetary funds at the end of 22q1 was 20.3 billion yuan, an increase of 6 billion yuan compared with the end of 21 years. It was the fund raised by the company's non-public offering of shares and the investment absorbed by its subsidiaries, and the net cash flow generated by financing activities increased by 101% year-on-year.
Internal synergy is expected to continue to strengthen and maintain the "buy" rating
After the reorganization, the company has a clinker production capacity of 330 million tons, a commercial mixing production capacity of 420 million m3 and an aggregate production capacity of 190 million tons, and the hierarchical structure is reduced from four levels to three levels. In the future, the internal synergy is expected to be further developed and the leading position will continue to be strengthened. The company announced that the proportion of cash dividends in 20212023 will be increased to more than 50%, and the return on investment will be improved. Considering the sluggish demand in Q1, the sales volume expectation was lowered, and the net profit forecast for 22-24 years was lowered to RMB 139 / 148 / 15.8 billion (previous value: RMB 152 / 172 / 19.3 billion). Referring to comparable companies, considering the leading position of the company and the large room to improve the operation efficiency of subsequent assets, the company was approved to give the target Pb of 1.6 times in 22 years, the target price was RMB 15.36, and maintain the "buy" rating.
Risk tips: cement demand is less than expected, price rise in peak season is less than expected, coal cost rise, etc.
