HUAXIN CEMENT(600801) CAITONG SECURITIES·2024-10-28 05:23Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - Cement prices continue to rise, and Q4 performance is expected to improve [1] - In Q3, the company reported revenue of 8.482 billion yuan, a year-on-year increase of 1.78%, while net profit attributable to shareholders decreased by 40.17% to 408 million yuan [2] - Domestic cement prices are under pressure, leading to a significant decline in profits for Q3 [2] - The company’s gross margin for Q3 was 24.74%, down 5.22 percentage points year-on-year, and net margin was 6.59%, down 3.89 percentage points [2] - The Yangtze River Delta region is planning to increase clinker prices, which may support Q4 performance [2] Financial Performance Summary - Revenue (in million yuan): - 2022A: 30,470 - 2023A: 33,757 - 2024E: 32,682 - 2025E: 35,738 - 2026E: 38,982 [4] - Net profit (in million yuan): - 2022A: 2,699 - 2023A: 2,762 - 2024E: 1,738 - 2025E: 2,190 - 2026E: 2,584 [4] - EPS (in yuan): - 2022A: 1.30 - 2023A: 1.33 - 2024E: 0.84 - 2025E: 1.05 - 2026E: 1.24 [5] Profitability Metrics - Gross margin for 2024E is projected at 23.6% [4] - Net profit margin for 2024E is projected at 6.2% [5] - PE ratios for 2024E, 2025E, and 2026E are projected at 15.8, 12.5, and 10.6 respectively [4] Future Outlook - The company is expected to achieve net profits of 1.738 billion yuan in 2024, with a year-on-year decline of 37.1%, followed by a recovery in 2025 and 2026 with growth rates of 26.0% and 18.0% respectively [3] - The latest closing price corresponds to a PE of 16 for 2024, indicating potential for investment [3]