HUAXIN CEMENT(SH:600801) Guoxin Securities·2024-10-30 12:01Investment Rating - The investment rating for Huaxin Cement (600801.SH) is "Outperform the Market" [3][17][20] Core Views - The report highlights that despite a year-on-year revenue growth of 2.29% to CNY 24.719 billion in the first nine months of 2024, the company's net profit decreased by 39.26% to CNY 1.138 billion, primarily due to declining domestic cement prices [1][5][17] - The report emphasizes the ongoing pressure on profitability due to a decrease in gross margin, which fell to 24.0%, down 2.28 percentage points year-on-year [1][8] - The company is focusing on overseas business expansion and non-cement operations, with non-cement revenue accounting for 47% of total revenue as of mid-2024 [1][17] Financial Performance Summary - For the first nine months of 2024, Huaxin Cement achieved a revenue of CNY 24.719 billion, with a net profit of CNY 1.138 billion, and an earnings per share (EPS) of CNY 0.55 [1][5] - The gross margin for the same period was 24.0%, with a quarterly breakdown showing Q1 at 21.9%, Q2 at 25.0%, and Q3 at 24.7% [1][8] - The operating cash flow for the first nine months was CNY 3.382 billion, reflecting a year-on-year decrease of 3.5% [1][8] Future Outlook - The report suggests that recent policy changes are expected to improve demand, alongside a recovery in cement prices, particularly in Hubei province, which has seen four consecutive price increases since September [1][17] - The earnings per share (EPS) forecast for 2024-2026 has been adjusted to CNY 0.88, CNY 1.00, and CNY 1.19 respectively, with a corresponding price-to-earnings (PE) ratio of 16.0, 14.0, and 11.8 [1][17][18]