HUAXIN CEMENT(600801) 中泰证券·2024-10-31 06:53Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 15% compared to the benchmark index within the next 6 to 12 months [7]. Core Views - The domestic cement market remains under pressure, with a year-on-year production decline of 10.7% in Q3, reaching a total of 1.33 billion tons. The production levels in July, August, and September were the lowest since 2010 for the same period [1][2]. - The company is expected to see a gradual price recovery in domestic cement sales due to price increases initiated at the end of September [1]. - The company's gross margin is under temporary pressure, with a Q3 gross margin of 24.7%, down 5.2 percentage points year-on-year. The net profit margin for Q3 was 6.6%, a decrease of 3.9 percentage points year-on-year [1][2]. - The overseas and non-cement business segments are expected to support growth, with significant contributions from operations in countries like Tajikistan, Kyrgyzstan, and Uzbekistan, and a notable increase in aggregate and commercial concrete revenues [1][2]. Summary by Sections Financial Performance - The company reported a revenue of 84.8 billion yuan for the first three quarters of 2024, a year-on-year increase of 2.3%. However, the net profit attributable to the parent company was 2.76 billion yuan, down 39.3% year-on-year [2][3]. - The forecast for net profit attributable to the parent company for 2024-2026 has been adjusted to 1.74 billion, 2.14 billion, and 2.53 billion yuan, respectively [1][2]. Market Dynamics - The report highlights that the domestic cement market is experiencing a downturn, with production and pricing pressures. However, the overseas market and non-cement business segments are expected to provide a buffer against these challenges [1][2]. - The company has established a significant presence in the overseas market, with a total cement clinker capacity of 15.44 million tons per year and ongoing projects that will further enhance this capacity [1][2]. Valuation Metrics - The current price-to-earnings (P/E) ratios for 2024-2026 are projected at 14.7, 12.0, and 10.1, while the price-to-book (P/B) ratios are expected to be 0.8 for 2024 and 0.7 for 2026 [1][2].