\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 585 Anhui Conch Cement Company Limited(600585) )
Matters:
The company released the first quarter report of 2022. In the first quarter, the company achieved a revenue of 25.46 billion yuan, a year-on-year decrease of 26.1%, and a net profit attributable to the parent company of 4.93 billion yuan, a year-on-year decrease of 15.2%.
Ping An View:
The real estate downturn is superimposed with repeated epidemics, and the performance is under pressure in the short term. In the first quarter, due to the great downward pressure on the real estate and the repeated impact of the epidemic on construction and logistics, the downstream demand for cement was much weaker than that in the same period of last year. In the first quarter, the national cement output fell by 12.1% year-on-year, and the company's cement production and sales were also under significant pressure. During the period, the revenue decreased by 26.1% year-on-year, and the cost rate increased by 1.3pct to 7.2% year-on-year. The sharp rise in coal costs also exacerbated the cost pressure, but benefited from the rise in cement prices, and the company's gross, The year-on-year increase was 4.5pct, which made the decline of net profit attributable to parent lower than that of revenue.
The epidemic situation does not change the demand recovery trend, and the development of infrastructure is expected to drive the release of demand. Although the short-term epidemic still affects the downstream demand, the current prevention and control has gradually achieved results, including the Central South and East China regions where the company focuses; At the same time, infrastructure projects are expected to accelerate the implementation, with infrastructure investment increasing by 10% year-on-year in the first quarter. On April 26, the central financial and Economic Commission proposed to study the issue of comprehensively strengthening infrastructure construction. Since April, the national cement delivery rate and grinding operation rate have also gradually rebounded, and the subsequent cement demand is expected to accelerate the repair. In addition, on the cost side, the recent regulation has actively implemented the policy of ensuring supply and price stability for the coal market, including the implementation of a temporary import tax rate of zero for coal. If the coal price continues to fall in the future, it will effectively alleviate the cost side pressure of cement enterprises and there is no need to worry too much about the profits of the industry.
Investment suggestion: maintain the previous profit forecast. It is estimated that the EPS will be 6.75 yuan, 6.91 yuan and 7.12 yuan respectively from 2022 to 2024, and the current share price corresponding to PE will be 5.9 times, 5.8 times and 5.6 times respectively. From the industry level, under the central demand for steady growth, the subsequent real estate fundamentals and infrastructure are expected to develop, driving the marginal improvement of cement demand. In the medium and long term, under the "double carbon" goal, the cement production capacity supply tends to shrink, Drive the industry to maintain a tight balance between supply and demand, and the profitability is expected to remain good. From the perspective of the company, conch, as a leader in the cement industry, focuses on East and South China, with unique regional layout and more resilient market demand. At the same time, cost control and operation efficiency have maintained the leading level in the industry for a long time, and the dividend proportion and dividend rate also have a certain attraction. We are optimistic about the company's subsequent performance and maintain the company's "recommended" rating.
Risk tips: 1) infrastructure and real estate investment are lower than expected, affecting the demand of the cement industry: under the pressure of real estate fundamentals, if the follow-up policy support is too small or the introduction time is too late, it will affect the real estate investment, the level and speed of commencement and repair, and then affect the scale and price performance of cement demand; Similarly, if infrastructure investment fails to play a role in stabilizing the economy in time, the demand for cement and other building materials may be released less than expected. 2) The prices of raw materials and fuels continue to rise, and the profit margin is further under pressure. At present, the coal price remains high, the power cost also rises, and the pressure on the cost side of cement production is large. If the subsequent coal and power prices continue to rise, the profit margin of the company will be further under pressure. 3) The development of aggregate, new energy and other businesses is less than expected: the company has actively expanded aggregate, stone, concrete, new energy and other businesses in recent years to promote the coordinated development with the main business and open up the future growth space. However, there are differences between the business model and cement clinker, and there are risks that the development of relevant businesses is less than expected.
