\u3000\u30 China High-Speed Railway Technology Co.Ltd(000008) 77 Xinjiang Tianshan Cement Co.Ltd(000877) )
Event: the company released the annual report of 2021, and the annual operating revenue was 169.98 billion yuan, an increase of 4.83% at the same time; The net profit attributable to the parent company was 12.53 billion yuan, a decrease of 3.53% at the same time; Deduct the net profit not attributable to the parent company of RMB 4.95 billion, an increase of 248.02% at the same time. In the fourth quarter alone, the company’s revenue was 51.52 billion yuan, an increase of 4.10% at the same time; The net profit attributable to the parent company was 2.65 billion yuan, with a decrease of 26.13%; Deduct the net profit not attributable to the parent company of RMB 3.52 billion, an increase of 819.34% at the same time. According to the first quarterly report of 2022, the company achieved a revenue of 28.26 billion yuan, a decrease of 1.77% at the same time; The net profit attributable to the parent company was 1.02 billion yuan, a decrease of 23.39%.
Comments:
In the past 21 years, the cement sales volume increased steadily and the price increased, and the rising cost reduced the profit. In 2021, the company completed major asset restructuring, and the cement clinker production capacity reached 330 million tons; Aggregate production capacity 190 million tons; The production capacity of commercial concrete is 420 million m3. In 2021, the company sold 282 million tons of cement, a decrease of 1.99% at the same time, and the price per ton was 359 yuan, an increase of 35 yuan at the same time; The gross profit per ton is 102 yuan, with a decrease of 2 yuan. The company sells 35.73 million tons of clinker, a decrease of 13.34% at the same time, and the price per ton is 49 yuan, a decrease of 3 yuan at the same time; The gross profit per ton is 23 yuan, with a decrease of 4 yuan. The company sold 105 million cubic meters of commercial concrete, an increase of 0.5% at the same time; The unilateral selling price is 464 yuan, with a decrease of 3 yuan; The unilateral gross profit is 68 yuan, down 20 yuan at the same time. Fuel cost accounts for the highest proportion in the production cost of cement clinker. The sharp rise in raw coal price makes the company’s comprehensive gross profit margin 24.9%, down 3.4pct at the same time. In addition, the company’s provision for asset impairment and credit impairment losses totaled 5.2 billion yuan, which also affected the performance to a certain extent.
22q1’s performance declined due to the decline of output and high cost. In 22q1, the national cement output decreased by 12%, while the national average price of cement in the same period was 517 yuan / ton, an increase of 15%. According to the national layout of the company’s cement business, it can be inferred that the sales volume of its products decreased by about 10%, and the price increased by double digits, making the revenue basically flat with the same period last year. As the most important cost item of cement production, the price of coal in 22q1 increased by more than 60% over the same period of last year. The increase of cost basically hedged the increase of cement price. The company’s Q1 gross profit margin was 18.85%, down 4.17pct at the same time. We judge that it is mainly due to the reduction of output and the increase of fuel cost.
Further integrate the cement assets of China Building Materials Group, increase the dividend proportion, and highlight the investment value. On April 16, 2022, the company announced that it planned to acquire the holding rights and other assets of related business subsidiaries such as cement held by the related party Ningxia Building Materials Group Co.Ltd(600449) in cash. If the transaction is successfully implemented, it will effectively solve the problem of horizontal competition between the company and Ningxia Building Materials Group Co.Ltd(600449) in the relevant businesses of the cement sector, further enhance the competitiveness of the company in the cement market and promote high-quality development. According to the announcement on increasing the proportion of cash dividends in 20212023 issued by the company on December 10, 2021, the company promises that the proportion of cash dividends in 20212023 will not be less than 50% and the long-term investment value will be prominent.
Profit forecast, valuation and rating: due to the completion of asset restructuring and changes in business scale and share capital, we lowered the company’s EPS for 22-23 years to 1.58 and 1.69 yuan respectively (24% and 21% lower than the last time), and increased the EPS for 24 years to 1.71 yuan. We are optimistic about the investment opportunities of water mud under the background of “stable growth” and maintain the “buy” rating.
Risk tip: the downstream demand is lower than expected, the price of raw and fuel materials rises, and the promotion of asset restructuring is lower than expected.
