\u3000\u30 Shenzhen Zhenye(Group)Co.Ltd(000006) 72 Gansu Shangfeng Cement Co.Ltd(000672) )
Event 1: the company released the annual report of 2021. In 2021, the company achieved a revenue of 8.31 billion yuan, a year-on-year increase of + 29.3%; The net profit attributable to the parent company was 2.18 billion yuan, a year-on-year increase of + 7.4%; Deduct the net profit not attributable to the parent company of RMB 2.1 billion, a year-on-year increase of + 13.3%; The net cash flow from operating activities was 2.84 billion yuan, a year-on-year increase of + 41%. The operating revenue in the fourth quarter was 2.62 billion yuan, a year-on-year increase of + 32.4%; The net profit attributable to the parent company was 590 million yuan, a year-on-year increase of + 14.7%; Deduct the net profit not attributable to the parent company of 580 million yuan, a year-on-year increase of + 1.0%.
Event 2: the company released the first quarterly report of 2022. In the first quarter, the company achieved a revenue of 1.49 billion yuan, a year-on-year increase of + 21.8%; The net profit attributable to the parent company was 340 million yuan, a year-on-year increase of – 3.8%; Deduct the net profit not attributable to the parent company of RMB 310 million, a year-on-year increase of – 9.3%.
Revenue side: the annual sales volume reached a new high, the ton price increased year-on-year, and the growth of the company was highlighted.
In terms of sales volume, the company’s cement clinker sales volume was 20.81 million tons in 21 years, with a year-on-year increase of + 22.5%. Although the dual control of energy consumption and the slowdown of project commencement in 21h2 affected the industry demand (the national cement output in 21 years was 2.36 billion tons, with a year-on-year increase of – 1.2%), the company relied on the release of new regional production capacity in Guizhou and Inner Mongolia in 21h1 and the continuous improvement of the operation efficiency of the new base, and the annual cement clinker sales volume reached a record high. Affected by the repeated boom of the company, the sales volume of cement and other clinker decreased by – 3.45% year-on-year. The company’s Guangxi Du’an project is planned to be put into operation this year, and there are still cement production capacity under construction in Duyun, Guizhou, Zhuji, Zhejiang and overseas Kyrgyzstan. The space for subsequent incremental development is gradually opening up.
In terms of price: we calculated that the ton price of cement clinker of 21q4 company was 346.4 yuan / ton, a year-on-year increase of + 25 yuan, and the ton price of cement clinker of 21q4 company was about 440 yuan / ton, a year-on-year increase. In September 21, the double control of energy consumption and subsequent power and production restriction significantly pushed up the price in the short term. Although it fell later, the overall price was still high year-on-year, which promoted the company’s annual and Q4 ton price to increase significantly year-on-year, and the year-on-year high trend of cement clinker price of 22q1 company continued. As of April 22, 2004, the national average price of cement was 510 yuan / ton (week on week + 2 yuan, year-on-year + 49 yuan). The recent epidemic control has slowed down the start of demand. However, although the peak season is late, the annual demand remains high, the platform + supply coordination willingness is stronger, and the year-on-year high of coal price is also supported. The cement price center in 22 years is expected to remain high in recent years.
Profit side: under the pressure of cost, the annual performance still achieved growth, and the profit per ton of 22q1 is still at a high level.
Cost per ton & gross profit per ton: in the past 21 years, the cost per ton of cement clinker of the company was 204.1 yuan / ton, with a year-on-year increase of + 34.9 yuan, and the gross profit per ton was 142.3 yuan / ton, with a year-on-year increase of -9.9 yuan. During the reporting period, the rise of coal price caused the rise of cost per ton, and the profitability was lower than that of cement sales in the western production area of East China, which affected the level of gross profit per ton. We estimate that the cost per ton of cement clinker of 21q4 company is about 245 yuan / ton, which has increased significantly year-on-year, and the gross profit per ton is about 195 yuan / ton. The year-on-year increase of 22q1 coal price intensifies the cost pressure (the closing price of power coal industry at the end of March is 1305 yuan / ton, year-on-year + 81.3%). We expect the company’s ton cost to rise in a single quarter, but the benefit price remains high. We calculate that the gross profit of 22q1 ton is about 170 yuan / ton, year-on-year + 40 yuan.
Ton cost & net profit per ton: the ton cost of the company in 21 years was 49.2 yuan / ton, a year-on-year increase of + 7.6 yuan. In terms of splitting, there is little year-on-year difference in the rate of sales and administrative expenses; During the reporting period, the operational financing of newly acquired factories and the supporting financing of large-scale production line construction increased, and the interest expenditure increased, resulting in a year-on-year financial expense rate of + 0.3pct; The R & D expense rate was + 1.1pct year-on-year, which was due to the increase of the company’s investment in energy-saving and emission reduction technology and project development. In 21 years, the net profit attributable to the parent company was 104.6 yuan / ton, a year-on-year increase of – 14.6 yuan. In addition, in the reporting period, the company’s previously invested Hefei Jinghe applied for the listing of the science and innovation board, which has been successfully held. The new round of financing valuation of Guangzhou Yuexin has increased significantly, realizing the investment income of the project of 60.16 million yuan, and the company’s investment in emerging industries has seen an initial return. 22q1’s net profit attributable to the parent company per ton was 98.4 yuan / ton, with a year-on-year increase of + 2.2 yuan. Although the profit in the first quarter decreased year-on-year due to the influence of sales volume, the profit per ton of the company’s main cement industry remained at a high level.
Investment suggestion: the company is a growing enterprise in the cement industry. Through the steady development of “one main and two wings”, the production capacity of cement clinker and aggregate can achieve rapid growth in the next few years, and the investment in emerging industries is advancing steadily, which is expected to gradually contribute to the income. The short-term epidemic affects the repair rhythm of cement demand, but the peak season is late, so we believe that the follow-up policies may strengthen the repair of the impact of the epidemic, and the infrastructure continues to make efforts under the stable growth, hoping to support the cement demand to maintain a high platform. The core logic of cement this year lies in the further coordination and optimization of the supply side. The scope and intensity of peak shifting this year are generally stronger than last year, which is conducive to the price increase of enterprises and the transmission of cost pressure. The decline in demand, repeated epidemics and rising coal prices are concentrated in Q1. It is expected that the enterprise performance has gradually bottomed out. Later, with the maintenance of high price center and the decline of high coal prices, the company hopes to take the lead in restoring performance growth with the support of volume increase logic.
Profit forecast: considering the downward demand for downstream real estate and the high coal price, we adjusted the profit forecast. It is estimated that the net profit attributable to the parent company in 2022 and 2023 will be 2.57 billion yuan and 2.78 billion yuan (the previous forecast was 2.82 billion yuan and 3.0 billion yuan), and the corresponding PE will be 6 or 6 times, maintaining the rating of “overweight”.
Risk warning: market demand fluctuation risk; Supply side constraint relaxation risk; The investment income of emerging industries is less than the expected risk; Risk of production capacity falling short of expectations, etc
