Conch Cement (600585) Quarterly Report Comments: High-Based Harvest Exceeds Expected Growth, Profit Expectations Continue to Rise
Event: The company released the third quarter report of 2019 and achieved revenue of 1107.
56 ppm, an increase of 42 in ten years.
37%; net profit attributable to mother is 238.
16 ppm, an increase of 14 in ten years.
96%, asset and debt restructuring at the end of the period20.
Among them, the third quarter achieved revenue of 391.
1.3 billion, an annual increase of 22.
04%, net profit attributable to mother 85.
56 ppm, an increase of 10 in ten years.
06%, deducted from the return to the mother 82.
69 ppm, an increase of 9 in ten years.
72%, single quarter gross profit margin of 32.
37%, net interest rate 22.
Slightly more than expected.
In terms of sales volume, the report shows that cement and clinker sales volume has increased, and real estate new construction / construction and infrastructure investment have contributed.
Combining the performance of 杭州桑拿网 some conch operating areas, from the perspective of the incremental cement output and perspective from January to September, the areas where the growth rate has expanded include Anhui (+9.
39%), Jiangsu (+11.
76%), Zhejiang (+6.
03%), Shaanxi (+9.
05%), Gansu (+14.
45%); from the perspective of gradually increasing investment in fixed assets, Anhui (+8.
4%), Zhejiang (+10.
1%), Hunan (+10.
3%), Guangdong (+11.
3%), Gansu (+5.
5%); from the perspective of housing starts / construction area exceeding the angle, Anhui (+2.
3% / + 5.
4%), Zhejiang (+3.
7% / + 13.
8%), Guangdong (-4.
3% / + 9.
3%), Guangxi (+26.
9% / + 12.
8%), Shaanxi (+14.
5% / + 11.
3%), of which Guangdong ‘s new construction started to decrease by 2 narrower than the previous month.8 units.
Consolidating national infrastructure performance, infrastructure investment in the first three quarters does not include the starting point of the power caliber +4.
5%, an increase of 0 over the whole year of 2018.
Based on the above, the overall performance of new real estate construction and construction demand is considerable, infrastructure investment continues to develop, and the cement industry has seen both volume and price rise, leading the first to benefit.
In terms of prices, the low season from July to August leaves enough room for peak season growth.
The Yangtze River Delta is about to launch the fourth round of price hikes in the peak season. On October 23, Jin Xunli and Yantai took the lead to implement 20 yuan / ton. The Pearl River Delta is expected to achieve the third round of price increases at the end of October and early November.Perform the third round of price increases.
According to digital cement statistics, last weekend, Hangzhou, Nanjing and Hefei’s high-standard tax-included prices were 530, 500, and 470 yuan / ton, respectively, and the prices at the time were respectively increased by 30, 25, and decreased by 20 yuan / ton.
July-September high standard price / year perspective (unit: yuan / ton), Hangzhou (495.
38 / + 9.
23), Nanjing (467.
69 / + 3.
08), Hefei (470 / + 44.
62), Nanchang (406.
15 / -22.
31), Guiyang (296.
92 / -91.
54), Guangzhou (487.
31 / -11.
92), the company covers the regional average, the price performance varies greatly due to rain, demand and other reasons.
We expect the highest price in the fourth quarter to be lower than last year. For example, Hangzhou last December was 620 yuan / ton. The current price is still 90 yuan away, which is equal to the contradiction.The impact of governance over the second is early in the Spring Festival next year (1.
25) Under the better weather conditions, the demand for rush work has expanded and concentrated. Third, infrastructure investment has accelerated.
In addition, the north shifted from the peak of Heilongjiang, and the southern energy-saving and environmentally friendly shutdown of the kiln also continued.
The report also needs to pay attention to the following aspects: (1) In addition to the increase in sales revenue, the trading business also increased. Considering that the gross profit margin of tradable goods fell by 1% (almost all included in costs), the operating cost for a single quarter increased by 32% Exceeded revenue growth rate of 22.
04%; (2) Financial expenses can increase by 148%, mainly due to the increase in interest income from deposits, which contributed positive earnings in a single quarter3.
2.8 billion; (3) Investment income increased by 186%, mainly due to the increase in wealth management income and investment income of joint ventures, which contributed 3 in a single quarter.
8.5 billion revenue.
(4) The expected increase in asset disposal income is 1073%, mainly due to the completion of asset disposal by some subsidiaries due to government demolition; (5) single-quarter operating external expenditure increased by 351.
16%, the main factor company’s retirement increased; (6) 288% increase in the net replacement of investment cash flow was mainly due to the increase in the purchase of wealth management products, which has not yet terminated 135 billion in wealth management products; monetary funds at the end of the period 445.
4.9 billion (previously + 43%), 60 billion in cash paid for purchasing fixed assets and intangible assets within 1-9 months; (7) short-term loans27.
2.2 billion, long-term loans 39.
100 million, an increase of 98% and 50% respectively over the beginning of the year, mainly due to increased loans by some overseas subsidiaries.
Production capacity continues to increase, and the overseas territory expands.
Summary of the report, new progress in domestic expansion and harvest, Sichuan Nanwei Cement 77 in August.
5 The initial clinker capacity index was replaced by Nanjiang Conch, and a new project with a capacity of 5000t / d was newly built.
Leading the steady growth, continue to be optimistic about expected performance.
We highlight the concern that the investment in infrastructure construction is expected to rise. The performance of social financing is higher than expected. The liquidity of upstream and downstream construction materials continues to improve. We are optimistic about infrastructure investment in the fourth quarter and the first half of next year, and the performance elasticity of Guangdong, Hunan, and Jiangxi regions (previous rainwater interference).
In addition, it is recommended to pay attention to the perspective of foreign investment. Within 6 months, the proportion of Shanghai-Hong Kong Stock Connect / Freely Circulating A-shares will be increased from 19% to 24%.
According to last year’s 30% dividend ratio, the current dividend rate corresponds to about 4.
5%.Taking into account the beautiful performance in the third quarter, the net profit attributable to the mother for 2019-20 will be from 318.
6.9 billion was adjusted to 333.
8.1 billion, with EPS of 6.
30 yuan and 6.
53 yuan, corresponding to PE 6.
4x, maintain BUY rating.
Risk warning: Infrastructure investment is less than expected, and Southwest supply and demand is less than expected.