HUAXIN CEMENT(SH:600801) Guohai Securities·2024-09-02 16:00Investment Rating - The report assigns a "Buy" rating for the company, Huaxin Cement, as of September 2, 2024 [1][4]. Core Views - The company has shown strong performance in overseas cement and aggregate businesses, while domestic cement demand remains under pressure [3][4]. - The report highlights the company's potential to benefit from high overseas cement demand and its early entry into the aggregate business, which has higher profit margins compared to cement [4]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 16.24 billion yuan, a year-on-year increase of 2.6%, but a decline in net profit attributable to shareholders by 38.7% to 730 million yuan [2][3]. - The cement business revenue was 8.37 billion yuan, down 9.0% year-on-year, with domestic and overseas revenues at 5.11 billion yuan and 3.58 billion yuan, respectively, showing a decline of 31.6% and an increase of 55.4% [3]. Sales and Margins - The overall sales volume for cement and clinker in H1 2024 was 28.484 million tons, down 4.9% year-on-year, with domestic sales down 15.7% and overseas sales up 47.0% [3]. - The average selling price per ton for overseas cement was 470.9 yuan, up 5.7%, while domestic prices fell by 18.8% to 244.5 yuan [3]. Non-Cement Business - Non-cement businesses, including aggregates and concrete, showed significant growth with revenues of 2.96 billion yuan and 3.94 billion yuan, respectively, marking increases of 37.0% and 24.2% year-on-year [3]. - The gross margins for aggregates and concrete were 47.4% and 11.6%, respectively, indicating a strong performance compared to the cement business [3]. Profitability and Cash Flow - The company's gross margin in H1 2024 was 23.7%, with a net profit margin of 4.5% [4]. - Operating cash flow for H1 2024 was 1.73 billion yuan, down 18.6% year-on-year, primarily due to increased cash payments to employees [4]. Future Projections - The report forecasts revenues of 34.91 billion yuan, 37.35 billion yuan, and 40.56 billion yuan for 2024, 2025, and 2026, respectively, with net profits projected at 2.00 billion yuan, 2.17 billion yuan, and 2.37 billion yuan [4][5]. - The expected EPS for the same years is 0.96 yuan, 1.04 yuan, and 1.14 yuan, with corresponding P/E ratios of 10.93, 10.12, and 9.25 [5][6].