ACC(SH:600585) Guohai Securities·2024-08-28 11:00Investment Rating - The report assigns a "Buy" rating for the company, Conch Cement (600585), marking its first coverage [1][7]. Core Views - The company's performance is under pressure due to weak cement demand, but cost control demonstrates resilience. In H1 2024, the total sales volume of cement and clinker was 128 million tons, down 4.9% year-on-year, with revenue of 33.58 billion yuan, a decrease of 20.8% [2][3][4]. Summary by Sections Financial Performance - In H1 2024, the company achieved operating revenue of 45.57 billion yuan, net profit attributable to shareholders of 3.33 billion yuan, and net profit excluding non-recurring items of 3.18 billion yuan, reflecting year-on-year declines of 30.4%, 48.6%, and 48.3% respectively [3][4]. - The average selling price per ton was 266.5 yuan, with costs at 205.2 yuan per ton, resulting in a gross profit of 61.3 yuan per ton, showing declines of 18.3%, 13.1%, and 32.0% year-on-year respectively [2][4]. Market Position - The company’s market share is expected to increase as its decline in sales volume is less than the industry average, which saw a 10.0% drop in national cement production in H1 2024 [2][4]. Capacity Expansion - In H1 2024, the company added 2.3 million tons of clinker capacity and 4.7 million tons of cement capacity, bringing total clinker capacity to 27.4 million tons and cement capacity to 39.9 million tons [2][4]. Non-Cement Business Growth - Non-cement businesses, including aggregates and ready-mixed concrete, reported revenues of 2.19 billion yuan and 1.18 billion yuan, respectively, with year-on-year growth rates of 29.8% and 20.6% [4][5]. - The revenue contribution from non-cement businesses increased from 4.1% in H1 2023 to 7.4% in H1 2024 [4]. Cash Flow and Financial Ratios - The company reported a significant improvement in cash flow, with operating cash flow of 6.87 billion yuan in H1 2024, up 35.3% year-on-year [5]. - The asset-liability ratio and interest-bearing debt ratio were 19.5% and 10.3%, respectively, showing slight increases year-on-year [5][6]. Earnings Forecast - The company is projected to achieve operating revenues of 135.74 billion yuan, 139.13 billion yuan, and 143.17 billion yuan for 2024, 2025, and 2026, respectively, with net profits of 8.01 billion yuan, 8.81 billion yuan, and 9.63 billion yuan [6][7].