Huaxin Cement (600801) 2019 Annual Report Performance Preview Comment: Higher Costs and Lower Costs, Expected Lower Sales Expectations for All Products

    Huaxin Cement (600801) 2019 Annual Report Performance Preview Comment: Higher Costs and Lower Costs, Expected Lower Sales Expectations for All Products

    The company announced on January 10 that it expects to return net profit to mother for half a year in 2019 + 18%?
    28%.

    We comment on this as follows: The sales volume of each product has steadily increased in 2019, and the 4Q19 cost increase and faster cost growth have made the performance slightly lower than our expectations. We judge that the actual performance will be transformed into a notice of the upper edge of the center; the company will increase its production capacity in 2020.There is still room for growth in cement sales, and prices may fluctuate at a high level; we expect aggregate sales to maintain rapid growth.

    Taking into account the rising cost in 4Q19 and the rapid growth of the expense side, we slightly cut our 2019 net profit forecast to 65.

    8 trillion (previous forecast 67.

    800 million), maintaining the net profit forecast for 2020-2167.

    9/66.

    100 million yuan, corresponding to PE is 8.

    2x / 8.

    0x / 8.

    2x, maintain “Buy” rating.

    18% increase in net profit attributable to mothers in 2019?

    28%, we judge that the actual performance will be on the upper edge of the forecast center.

      The company expects that net profit attributable to mothers in 2019 will increase by 9 compared to 2018.

    1?
    14.

    2.8 billion to 60.

    9?66.

    1 ppm (18% increase in one year?
    28%), the growth of net profit attributable to mother is slightly lower than our expectation. We judge that it is mainly due to the increase in raw materials and other costs in 佛山桑拿网 4Q19 and the rapid growth of expenses such as employee budgets under the high prosperity of the industry. The consolidated operating data has grown steadily.The actual annual results will be located on the upper edge of the forecast center.

    In addition, we judge that the company’s dividend rate in 2019 has the potential to increase.

    In 2019, sales of all products achieved steady growth. Cement sales continued to increase 7% steadily under the disturbance of the fourth quarter military games.

    1) Cement clinker: The company’s sales volume of cement clinker in 2019 is about 7,700 tons (+ 9% per year). According to our estimation, the sales volume of cement clinker in 4Q19 is about 2150 (at least +7).

    1%), Q4 demand remained well under the temporary disturbance of the military games.

    2) Aggregate: The company’s aggregate 杭州桑拿网 sales volume in 2019 is about 1755 seconds (interval + 21%), and then the target of 2662 hours is started. Environmental protection tends to be severe and the pace of production capacity release changes or affects aggregate sales; we calculated the 4Q19 company’s aggregates.Sales are expected to increase by about 13% each year.

    3) Concrete: The company’s concrete sales volume in 2019 is about 424 GM (previously + 21%), exceeding the initial goal of 368 GM.

    Domestic and overseas production lines are advancing steadily, and cement sales continue to increase in 2020; the increase in aggregate production capacity is expected to increase the company’s profits.

    Domestic projects (Kunminglu advises, Hubei Yellowstone, etc.) are expected to be put into production in 2020, and overseas projects (Nepal, Uzbekistan) are also steadily advancing. We expect the company’s cement sales volume to grow in 2020 with the continued increase in production capacity.年 年湖北区域水泥量价均呈现强劲状态,预计2020年吨价格或高位震荡。
    In addition, the company’s aggregate construction projects are gradually put into production and the production capacity is exerted. It is expected that the company’s aggregate sales volume will maintain a rapid growth in 2020 and increase the company’s profits.

    Risk factors: counter-cyclical adjustment is weaker than expected; peripheral low-price cement disturbs the market.

    Investment suggestion: Considering the rising cost of 4Q19 and the rapid growth of expenses, we slightly cut the company’s 2019 net profit forecast to 65.

    8 trillion (previous forecast 67.

    800 million), maintaining the net profit forecast for 2020-2167.

    9/66.

    10,000 yuan, corresponding to EPS forecast of 3.

    14/3.

    24/3.
    15 yuan (previous forecast was 3).

    23/3.

    24/3.

    15 yuan), corresponding to PE is 8.

    2x / 8.
    0x / 8.

    2x, maintain “Buy” rating.

    Categories: 洗浴