Huaxin Cement (600801): Growth in the first quarter is expected to continue to maintain a high level of prosperity

Event: The company released the first quarter report of 2019, and achieved revenue of 59 in 19Q1.

76 ppm, an increase of 32 in ten years.

53%, realizing net profit attributable to mother 10.

110,000 yuan, an increase of 90 in ten years.

6%, slightly higher than the performance forecast center; net profit after deduction is 9.

7 ppm, an increase of 89 in ten years.


Maintain “Buy” rating and maintain target price of 32.

16 yuan: Against the background of supply-side reform, the company’s cement production capacity has expanded against the trend, fully benefiting from the improvement of the cement industry’s prosperity and surpassing market expectations; meanwhile, the expansion of the industrial chain has been accelerated, and aggregate and hazardous waste treatment businesses have led to new developments.Growth points.

We temporarily maintain the company’s EPS for 19-20 is 4.

02, 4.

19 yuan; the corresponding PE estimate for 19-20 years is 6.

6 and 6.

3 times, maintaining the target price of 32 for the time being.

16 yuan, maintain “Buy” rating.

Hubei has strong demand, and both volume and price have risen significantly.

We estimate that the company’s Q1 cement clinker sales volume is about 1510, an annual increase of about 19%.

We believe that the reason for the company’s sales exceeding expectations is that the company’s clinker export ratio increased during the Q1 Spring Festival; the second is that the weather in March was good throughout the year and the concentrated release of demand led to the rapid recovery of volume. Among the key projects in Hubei, the demand for construction started strongQ1 Hubei’s cement output increased by 14.

25%, an area where the growth rate in Central China is accelerating.

The average factory price of the company’s Q1 ton is about 350 yuan, which has increased to about 28 yuan / ton. We believe that the Q1 price has gradually increased to benefit from the high base of Q4 price in 18 years.; The key area where the combined company’s production capacity is maintained maintains a high degree of prosperity. In the middle and late March, a new round of price increases was implemented smoothly, of which the prices in the two lakes and the southwest region increased by 20-30 yuan.An increase of about 21 yuan will further increase profitability; the ton fee will be 44.

8 yuan, more than ten years 7.

65 yuan / ton, mainly due to the company’s reimbursement of the remaining budgeted financial expenses.

The sales volume of aggregate Q1 increased by 46%, which will become a new profit growth point.

We estimate that the company’s Q1 aggregate sales exceeded 300 tons, an increase of about 46% per year. Based on the level of aggregate gross profit margin of about 64% last year, the aggregate business continued to grow.

Relying on abundant mining resources, the company accelerates the development of aggregate business. At present, the company’s aggregate production capacity is 2500 tons / year, and it is planned to achieve 100 million tons / year aggregate production capacity by 2020. The state ‘s mining inspections have become increasingly strict through the state.The nature of resource barriers is becoming increasingly prominent. Accelerating the development of aggregate business will create new points of performance growth.

Good cash flow and strong balance sheet.

The operating net cash flow of the core company was reported as 13.

0.5 billion, an annual increase of 118.

6%, cash in hand is 57.

5.6 billion, an increase of 86 per year.

5%, with sufficient cash flow protection measures, the business is steadily progressing, debt repayment is optimized to optimize the debt structure, and financial expenses are greatly reduced. At the same time, abundant cash flow has increased the company’s dividend ratio and returned to the shareholder base.

The expansion of production capacity against the trend, the military games may help 19 years of high flexibility.

1) The two lakes regions are expected to maintain a high level of prosperity in 1919. Among them, the Hubei region has increased its 19-year GDP growth target against the trend, demonstrating confidence in economic development, and infrastructure and real estate investment have replaced the full.The gap, leading 杭州夜网 a new round of price increases; 2) The Southwest region benefited from the promotion of targeted poverty alleviation, and demand performance was dazzling. 18 Southwest and Southwest China’s cement output increased.

44%, which is higher than the national average. There is no worry about the short-term production capacity impact in the region, and there is still room for improvement in supply-side off-peak production in Yunnan.

We believe that the company’s production capacity covers the Yangtze River Economic Belt, and relying on convenient water transportation, it will fully benefit from the new opportunities brought by the coordinated development of the Yangtze River Economic Belt.

Risk reminder: Real estate investment grows sharply, peak production is less than expected, and cumulative accumulation is released significantly