HUAXIN CEMENT(SH:600801) Soochow Securities·2024-10-27 23:38Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company reported a revenue of 24.719 billion yuan and a net profit attributable to shareholders of 1.138 billion yuan for the first three quarters of 2024, reflecting a year-on-year change of +2.3% and -39.3% respectively. In Q3 alone, the revenue was 8.482 billion yuan with a net profit of 408 million yuan, showing a year-on-year change of +1.8% and -40.2% [2] - Domestic cement demand is stabilizing, with Q3 revenue remaining steady. The gross margin for Q3 was 24.7%, down 5.2 percentage points year-on-year, primarily due to unexpected declines in domestic cement demand. However, it is expected that margins may improve in Q4 as prices rebound in the central region [2][3] - The company has effectively controlled its operating expenses, with a Q3 expense ratio of 14.3%, down 0.5 percentage points year-on-year. The sales net profit margin and net profit margin attributable to shareholders were 6.6% and 4.8%, respectively, both down year-on-year [2] - Capital expenditure has been reduced, with cash outflows for fixed assets and other long-term assets amounting to 1.977 billion yuan, a decrease of 16.5% year-on-year. The company's debt level has also decreased, with a debt-to-asset ratio of 51.5% [2] Summary by Sections Financial Performance - Total revenue for 2022 was 30.47 billion yuan, with a forecast of 33.757 billion yuan for 2023 and 34.13 billion yuan for 2024, reflecting a year-on-year growth of 10.79% and 1.10% respectively [1] - The net profit attributable to shareholders was 2.699 billion yuan in 2022, with forecasts of 2.762 billion yuan for 2023 and 1.736 billion yuan for 2024, indicating a significant decline of 37.16% in 2024 [1] - The latest diluted EPS is projected to be 0.83 yuan for 2024, with a P/E ratio of 15.81 [1] Industry Outlook - The cement industry is expected to see a rebound in demand due to strengthened supply-side discipline and improved pricing dynamics. The company is well-positioned to benefit from this recovery, particularly in the central market [3] - The company's overseas expansion is progressing steadily, with overseas cement revenue accounting for 22% of total revenue in the first half of the year [3] Valuation - The profit forecasts for 2024-2026 have been adjusted to 1.74 billion yuan, 2.13 billion yuan, and 2.36 billion yuan respectively, with corresponding P/E ratios of 16, 13, and 12 times [3]