Conch Cement (600585) Quarterly Report Comments: Q3 Off-season Sales Exceed Expected Growth

Conch Cement (600585) Quarterly Report Comments: Q3 Off-season Sales Exceed Expected Growth

The off-season performance was slightly better than expected. In the peak season of Q4, companies with good supply and demand gradually realized revenue of 1108 trillion from January to September, an increase of 42% year-on-year. Net profit attributable to mothers was 23.8 billion yuan, an increase of 15% year-on-year, slightly better than the market and our expectationsBillion); net profit of RMB 23.2 billion deducted from non-attributed mothers, a year-on-year increase of 14%.

The company ‘s Q3 revenue and return to net profit increased earlier than Q2 in the short-term, due to the slight decline in prices during the off-season, but the sales growth rate of Q3 was better than 南京夜网 expected. Land demand in Q4 is expected to remain unchanged. Infrastructure investment continues to recover moderately., Yunnan, Jiangxi and other provinces have recently resumed strong demand. They continue to be optimistic about the company’s gradual operating growth and asset quality optimization, and maintain the company’s EPS 6 in 19-21.

07/6.

26/6.

48 yuan forecast, maintain “Buy” rating.

In Q3, the off-season sales growth exceeded expectations. The average price dropped slightly in the previous quarter. In 19Q3, the company realized revenue of 39.1 billion yuan, a year-on-year increase of 22%. It realized a net profit attributable to its mother of 8.6 billion yuan, a year-on-year increase of + 10%.12% increased, but still maintained rapid double-digit growth.

We estimate that the company produced and sold cement clinker in the first three quarters2.

300 million tons, an increase of 8% year-on-year, of which 8,600 vehicles were sold in the third quarter, an increase of 12% year-on-year.

The average price from January to September without tax is about 325 yuan, which is 8 yuan lower than that of 19H1. The average price in the off-season in Q3 was 311 yuan, a decrease of 10 yuan.

The contribution of trade income continued to increase, and asset quality was re-optimized. We estimated the company’s cement clinker trade sales volume from January to September was 0.

8.4 billion tons, an increase of 261% before. Due to the increase in the proportion of low-margin trading business, the company’s comprehensive gross profit margin was 32.

4%, a decline of 9 per year.

0pct, a decrease of 11 from 19H1.

8pct narrows.

Expense rate during period 5.

0%, down by 1 every year.

7pct, the three expense ratios (including research and development) have achieved small declines for many years.

The company’s net operating cash inflow from January to September was US $ 26 billion. At the end of September, the company had 445 trillion cash in hand, continuing its net cash position, and a gearing ratio of 20.

5%, up slightly by the end of June 19, 1.
.

5pct, asset quality maintains industry-leading advantages.

The investment side showed a reasonable growth, Q4 outlook is optimistic According to the National Bureau of Statistics, real estate investment YoY + 10 from January to September this year.

5%, unchanged from the previous value; infrastructure investment YoY + 4.

5%, better than the previous value of 4.

2%, downstream investment showed a strong.

Since this year, the market has expressed a decrease in demand for real estate, but the national cement output from January to September16.

900 million tons, a year-on-year increase of +6.

9%, actual demand is better than expected.

Among them, Guizhou, Yunnan, and Jiangxi crops continued to grow at -2.

1%, 9.

2%, 3.

0%, which is better than the growth rate of -3 in the first six months.

5%, 8.

2%, 0.

7%, which is in line with the expectations of our Interim Report. In the second half of the year, the supply and demand in the mid-western region will usher in improvement.

We expect the counter-cyclical adjustment is expected to increase in the context of continued downward economic pressure, and the outlook for Q4 cement downstream demand is optimistic.

Cement value leader, maintain “Buy” rating company Q3 income and net profit return to double-digit rapid growth, we expect Q4 downstream land demand will remain strong, infrastructure investment continues a moderate recovery, and Northeast and Jiangsu due to overloadAccidents and highways have exceeded expectations. The progress of clinker transportation across regions is expected to decline, and regional prices are expected to be strong.

We maintain the company’s net profit forecast of US $ 322/332/344 million attributable to the parent for the period of 19-21, taking into account the company’s leading position and a more stable dividend yield of 5% -5%, maintaining the company’s target price of 42.
56-48.
59 yuan (corresponding to 7-8xPE in 19 years), maintain “Buy” rating.

Risk reminder: The real estate new construction starts to speed up the shift significantly, and the implementation of staggered 厦门夜网 peak production is not up to expectations.

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