TSC(000877) Changjiang Securities·2024-11-11 08:05Investment Rating - The investment rating for Tianshan Co., Ltd. is "Buy" and is maintained [3]. Core Views - The domestic cement industry's profitability is at a bottoming phase, with expectations for elasticity in Q4 2024 [3]. - In the first three quarters of 2024, the company's operating revenue was 61.46 billion yuan, a year-on-year decrease of 23.55%, and the net profit attributable to the parent company was -3.748 billion yuan, a year-on-year decline of 7471.1% [3][4]. - The company sold 16.53 million tons of cement clinker, down 15.52% year-on-year, and 5.315 million cubic meters of ready-mixed concrete, down 0.73% year-on-year [4]. - The company anticipates a rebound in the domestic market in Q4 2024, driven by significant price increases in certain regions since September [4]. - The company is also looking forward to medium-term growth in overseas markets, particularly in Africa, following the acquisition of a Tunisian company [5]. Summary by Sections Financial Performance - In Q3 2024, the total operating revenue was 21.76 billion yuan, a year-on-year decrease of 19.24%, with a net profit of -334 million yuan, down 267.64% year-on-year [3][4]. - The estimated sales volume decline for Q3 2024 is approximately 20%, exceeding the industry average [4]. Industry Analysis - The demand and profitability in the cement industry continue to be under pressure, with new housing starts down 22.2% year-on-year and national cement production down 10.7% in the first three quarters of 2024 [3][4]. - Infrastructure investment growth has slowed to 4.1%, below the previous year's growth of 5.9% [3]. Future Outlook - The company expects Q4 2024 to be a traditional peak season, with supply constraints potentially leading to improved profitability [4]. - The anticipated earnings for 2024 and 2025 are projected at 1.8 billion yuan and 1.0 billion yuan, respectively, corresponding to P/E ratios of 257 and 46 times [5].