Dongxing Securities·2024-08-29 03:03Investment Rating - The report maintains a "Strong Buy" investment rating for the company [2][4]. Core Views - The company reported a significant decline in revenue and profit due to weak demand in the cement industry, with a 30.37% year-on-year decrease in revenue to 45.566 billion yuan and a 48.59% drop in net profit to 3.326 billion yuan in the first half of 2024 [2][3]. - Despite the challenging environment, the company has a strong risk resistance capability, with a low debt ratio of 19.50% and a cash asset ratio of 27.83%, allowing it to maintain a certain level of profitability [3][4]. - The company is expected to see a gradual recovery in net profit from 8.324 billion yuan in 2024 to 10.306 billion yuan in 2026, with corresponding EPS increasing from 1.57 yuan to 1.94 yuan [4][9]. Financial Performance Summary - In the first half of 2024, the company's self-produced sales volume was 12.6 million tons, a decrease of 3.35% year-on-year, which is less than the industry average decline of 10% [3]. - The average selling price of cement fell to 239.76 yuan per ton, down 21.58% year-on-year, contributing to the largest revenue drop in 25 years [3]. - The company's gross margin and net profit margin were 18.93% and 7.43%, respectively, both showing a decline compared to previous periods [3]. Future Outlook - The company is positioned to benefit from potential improvements in the supply-side policies and market conditions, as it continues to leverage its scale and cost advantages [3][4]. - The projected earnings for 2024-2026 indicate a recovery trend, with net profits expected to rise steadily, reflecting the company's resilience and strategic initiatives [4][9].