SHANGFENG CEMENT(000672) 海通证券·2024-08-16 00:36Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1][6]. Core Views - The report anticipates that the profitability of the cement industry will turn positive year-on-year in Q3 2024. The company expects a net profit attributable to shareholders of 160 to 180 million yuan in the first half of 2024, reflecting a year-on-year decline of 66.13% to 69.89%. The main reasons for the profit decline in the first half of 2024 are the drop in both sales volume and prices of cement products due to market imbalance. However, from June 2024, the price difference between cement and coal is expected to gradually recover, which may positively impact industry profitability [5][6]. Summary by Sections Financial Performance - The company's revenue for 2023 is projected at 6,397 million yuan, with a year-on-year decrease of 10.3%. The net profit is expected to be 744 million yuan, down 21.6% year-on-year. The earnings per share (EPS) for 2024 is estimated at 0.54 yuan, with a projected gross margin of 26.7% [7][10]. Business Strategy - The company is implementing a "one main, two wings" strategy, focusing on cement and building materials as the main business while expanding into aggregate, environmental logistics, and new economic investments. The company has significantly increased its fixed assets from 2.65 billion yuan in 2019 to 5.13 billion yuan in Q1 2024, with substantial growth in cement production capacity [5][6]. Shareholder Returns - The company has increased its dividend payout ratio to 51.4% in 2023 and announced a share buyback plan of 100 to 200 million yuan in June 2024, indicating a proactive approach to returning value to shareholders [6][10]. Valuation - The report estimates the company's EPS for 2024 to be 0.54 yuan, with a price-to-earnings (P/E) ratio of 14 to 16 times, suggesting a reasonable value range of 7.56 to 8.64 yuan per share [6][9].