JIDONG CEMENT(000401) Soochow Securities·2024-09-04 12:30Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company reported a Q2 turnaround with a single-quarter profit, driven by increased contributions from aggregate business despite ongoing pressure on cement demand [1] - The company’s revenue for the first half of 2024 was 11.22 billion yuan, down 23% year-on-year, with a net profit attributable to shareholders of -0.806 billion yuan, a 120% decline year-on-year [1] - The report highlights significant improvements in gross margin in Q2, attributed to better cost control and a decrease in coal prices [1] Summary by Sections Revenue and Profitability - The company achieved a total revenue of 11.22 billion yuan in H1 2024, down 23% year-on-year, with a net profit of -0.806 billion yuan, down 120% year-on-year [1] - In Q2 alone, revenue was 7.88 billion yuan, down 15% year-on-year, with a net profit of 0.293 billion yuan, down 31% year-on-year [1] - Cement and clinker sales volume for H1 2024 was 38.18 million tons, down 13% year-on-year, with average price and gross profit per ton at 241 yuan and 25 yuan, respectively [1] Cost and Margin Analysis - The report notes a decrease in unit cost due to lower coal prices and improved cost management, with a 4.18% reduction in comprehensive energy consumption for clinker [1] - The aggregate business saw revenue growth of 24% year-on-year, reaching 0.729 billion yuan, with a gross margin of 50.7%, up 2.8 percentage points [1] - Q2 gross margin improved to 20.5%, up 3.2 percentage points year-on-year and 22.8 percentage points quarter-on-quarter [1] Financial Health - The company’s cash flow from operating activities for H1 2024 was 0.833 billion yuan, down 15% year-on-year, indicating better performance than profit figures [1] - Capital expenditures decreased by 34% year-on-year to 0.608 billion yuan, reflecting a slowdown in capital spending [1] - As of the end of Q2, the company’s debt ratio was 50.26%, with interest-bearing debt reduced by 1.36 billion yuan [1] Market Outlook - The report anticipates a gradual improvement in the northern market's competitive landscape, with potential benefits from supply-side reforms and stricter environmental policies [1] - The company is expected to enhance its operational performance through cost reduction and efficiency improvements, alongside strategic market consolidation and overseas capacity expansion [1] - Profit forecasts for 2024 and 2025 are adjusted to 0.14 billion yuan and 0.357 billion yuan, respectively, with a new estimate for 2026 at 0.693 billion yuan [1]