\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 77 Xinjiang Tianshan Cement Co.Ltd(000877) )
The revenue scale remained stable, and the performance decreased in the first quarter. In the first quarter of 2022, the company realized an operating revenue of 28.257 billion yuan and a net profit attributable to the parent company of 1.023 billion yuan. After retroactive adjustment, the year-on-year changes were – 1.77% and – 23.39% respectively. The main reasons for the year-on-year decrease in performance include the year-on-year increase in the cost of raw and combustion materials such as coal, the obvious slowdown in the commencement and resumption of downstream project construction and the continuous downturn in the demand for cement and commercial concrete due to the repeated impact of epidemic situations in many places across the country.
The profitability is under slight pressure, and the asset-debt structure is optimized month on month. In 2022, Q1 company achieved a gross profit margin of 18.8%, a year-on-year decrease of 4.2 percentage points, and a net profit margin of 4.1%, a year-on-year decrease of 1.5 percentage points. The cost control remained optimized. During the period, the cost rate reached 12.40%, a year-on-year decrease of 1.8 percentage points, of which the sales / management / Finance / R & D cost rate was 1.5% / 6.5% / 3.8% / 0.6% respectively. After tracing the caliber, the year-on-year change was – 0.8pct / – 0.8pct / – 0.5pct / + 0.3pct respectively. The increase of R & D cost rate was mainly due to the increase of R & D investment. The company’s cash flow performance was average. The net cash flow from operating activities was -1.639 billion yuan, a year-on-year increase of – 140.66%, mainly due to the year-on-year decrease in cash received from the sale of goods and the provision of labor services. The asset debt structure was optimized month on month, with the asset liability ratio reaching 67.46% at the end of the first quarter, down 0.5 percentage points month on month.
Optimize the operation and management mode and acquire Ningxia Building Materials Group Co.Ltd(600449) cement assets. Since the completion of major asset restructuring with the cement and other businesses of China building materials last year, the company has quickly started the optimization of business model, established a flat management composed of “listed companies – regional companies – member enterprises”, divided into 14 regional companies, optimized market layout and reasonably allocated resources. During the reporting period, the company has announced that it plans to register East China Materials Co., Ltd. to be responsible for the development of aggregate, commercial concrete and other businesses in East China, Optimize regional operation and layout. In April this year, Ningxia Building Materials Group Co.Ltd(600449) announced to sell the holding rights and other assets of cement and other related business subsidiaries to the company, so as to promote the solution of horizontal competition, improve market order and consolidate the scale of the company’s cement business.
Risk warning: the cost rise is higher than expected; The implementation of the project is not as expected; The epidemic situation is repeated.
Investment suggestion: synergy is expected to appear and maintain the “buy” rating.
Xintianshan cement has become the largest cement enterprise in China. At present, it has a clinker production capacity of 330 million tons, a commercial mixing production capacity of 400 million cubic meters and an aggregate production capacity of 150 million tons. In the future, the company will focus on the industrial chain of cement, commercial mixed aggregate, consolidate the cement business, optimize the commercial mixed sector, and further expand the aggregate industry. With the continuous improvement of the quality of the company’s internal operation chain, which is expected to be “64.1/2/24 yuan in 2026 / year” and “64.1/2/24 yuan in 2027 / year”, the company’s internal operation chain is expected to be gradually improved, and the corresponding quality is expected to be maintained to be “64.1/2/24 yuan in 2027 / year”.
