Jidong Cement (000401): Asset impairment drags down current performance North China’s leading company is still expected in the future
Event: The company released the third quarter report of 2019, and the first three quarters achieved revenue of 262.
54 ppm, an increase of 16% over ten years, and net profit attributable to mothers 24.
70,000 yuan, an increase of about 36% in ten years, net profit after deduction is 24.
730,000 yuan, an increase of 1112 in ten years.
4%; of which revenue was 101 in the third quarter.
7.5 billion (+3.
95%), net profit attributable to mother 9.
900 million (+10.
45%), net profit after deduction is 10.
2.6 billion (+54.
Opinion: Affected by National Day production restrictions, Q3 sales were slightly lower than expected.
With the integration of Beijing-Tianjin-Hebei and the construction of the Xiong’an New Area, cement demand in the Beijing-Tianjin-Hebei region is strong. The growth rate of cement output in North China from January to September was 11.
Demand has maintained a steady growth of 5%. Among them, the Beijing-Tianjin-Hebei region was affected by the National Day’s production restriction, and the output in September all appeared to varying degrees; the company’s comprehensive sales of cement clinker in the first three quarters 佛山桑拿网 were about 7414, which increased by about 4.
58%, of which Q3 sales for the year 2838, down 10 chain.
2%, a year-on-year decline of 6%, initially due to the high temperature and rain in Beijing-Tianjin-Hebei region in August due to the impact of high-temperature, rainy weather, sales have improved, followed by the National Day supply and demand are weak, after September 20th demand increased to cause sales to be less than expected; according to ourIt is estimated that the average ex-factory price of Q3 company is about 320 yuan / ton, which is an increase of about 7 yuan / ton from the previous month. The gross profit of Q3 cement clinker ton is about 122 yuan / ton, which is basically unchanged from the previous month. Asset impairment drags down the current performance and will lightly enter the market in the future.
The report summarizes that the company and its subsidiaries’ accounting items for the identification of bad debt reserves and various long-term asset impairment reserves totaled approximately 1.
6.3 billion, dragging down current performance.
We believe that the company’s impairment treatment of bad debts and non-performing assets is equivalent to removing the burden and going light in the future; while the Beijing-Tianjin-Hebei region is mainly dominated by national key projects and receives strong financial support, so the project implementation rate is high and demand is high.It is guaranteed, while the peak-peak production is normalized and environmental protection tends to be severe. The comprehensive supply in the normal area is controllable, and the supply and demand layout is stable and good. The company as a leader in Beijing, Tianjin and Hebei will fully benefit from the improvement of regional prosperity.
Cash flow was plentiful and the expense ratio continued to decrease during the period.
At the end of September, the company’s operating net cash flow was 57.
9.6 billion, an annual increase of 49.
08%, of which Q3 is 21.
1.7 billion, while the company has 75 in hand.
US $ 7.3 billion, an annual increase of about 10%. The excess cash flow is sufficient to ensure the steady progress of the business, and gradually repay the debt to supplement the debt, optimize the debt structure, and the company’s financial expenses in the third quarter.
63%, a year-on-year decrease of about 1 and a month-on-month decrease of about 0.
3 units; the company’s Q3 period expenses 15.
23%, a reduction of 0 per year.
After 56 mergers, the business after the reorganization has continued to converge, the management level has been steadily improved, and the costs have continued to decline during the period.
Beijing-Tianjin-Hebei and surrounding cities have strict production restrictions in autumn and winter.
Recently, the Ministry of Ecology and Environment formally issued the “Action Plan for Comprehensive Treatment of Atmospheric Pollution in Beijing-Tianjin-Hebei and Its Surrounding Areas in Autumn and Winter 2019-2020”, requiring Beijing-Tianjin-Hebei and its surrounding areas to fully complete the 2019 environmental air quality improvement goals and coordinately control greenhouse gas emissions.During autumn and winter (October 1, 2019 to March 31, 2020) PM2.
5 The average concentration decreased by 4%, and the number of days of severe pollution and above decreased by at least 6%. We believe that 2020 is the target year for winning the three-year action plan for the defense of the blue sky. The success of the autumn and winter 2019-2020 will directly affect the achievement of the 2020 target.At the same time, considering the deviation of the overall meteorological conditions in autumn and winter this year, the environmental protection limit in autumn and winter around Beijing-Tianjin-Hebei is still strict. Against the background of continued recovery in infrastructure investment, the demand in Beijing-Tianjin-Hebei region has steadily increased, while the supply side has maintained strict peak shifts.Production is expected to continue to improve the regional supply and demand pattern.
The new Jidong region ‘s right to speak has increased, and the upward trend in the next two years is determined: We believe that the company ‘s outstanding performance in the first half of the year will be the beginning of a high business climate in the next two years.Demand in the Tianjin-Hebei region is expected to grow steadily. At the same time, the construction of the Xiong’an New District has begun, which will bring deterministic increase in the future. As the throughput of small businesses has been fully released at present, it provides room for gradual reduction, and the uncertainty of the continuous improvement of the supply and demand pattern is strong;As the integration of Jinyu and Jidong continues to deepen, corporate management and operating efficiency will go further, the company’s internal and external environment will improve, and future performance flexibility will be fully released.
Investment suggestion: We temporarily maintain the company’s net profit attributable to the parent in 2019 and 2020 respectively at 30.
8.4 billion, 35.
08,000 yuan, corresponding to 2 EPS.
29 and 2.
6 yuan, corresponding to a PE evaluation of 19-20 years is 6.
7 and 5.
9 times, optimistic that the company will benefit from the high prosperity of the Beijing-Tianjin-Hebei region and maintain a target price of 24.
4 yuan and “Buy” rating.
Risk reminder: real estate and infrastructure investment exceeds expectations, the demand side will be further reduced; supply-side reforms are gradually expected, and gradual withdrawal is gradually exited, and the supply and demand pattern is worsened; rising prices of coal, ore, etc., increase costs