HUAXIN CEMENT(600801) 华泰证券·2024-12-03 01:55Investment Rating - The investment rating for Huaxin Cement is "Buy" for both HK and CH shares, with target prices set at HKD 10.09 and RMB 15.73 respectively [2]. Core Views - Huaxin Cement plans to acquire 83.81% of Lafarge Africa Plc for USD 838 million, indicating a strong commitment to international expansion and enhancing its global strategy [5][6]. - The acquisition is expected to leverage Huaxin's extensive experience in overseas project operations, potentially increasing its overseas cement capacity to over 33 million tons per year [7]. - The domestic market is anticipated to recover by 2025, creating a synergy between domestic and international operations [8]. Summary by Sections Financial Data - As of December 2, 2023, the closing price for Huaxin Cement was HKD 7.86 and RMB 13.73, with market capitalizations of HKD 16.34 billion and RMB 28.55 billion respectively [3]. - The estimated earnings per share (EPS) for 2024, 2025, and 2026 are RMB 1.04, 1.29, and 1.35 respectively [9]. Acquisition Details - Lafarge Africa Plc has a cement production capacity of 10.6 million tons per year and is one of the leading companies in Nigeria's cement industry [6]. - The implied enterprise value for the acquisition is USD 1.057 billion, with an EV/EBITDA multiple of 7.0x based on 2023 estimates [11]. Market Outlook - The overseas market has become a significant growth driver for Huaxin Cement, with overseas clinker sales increasing by 41% year-on-year [7]. - The company expects domestic cement prices to rise as supply-side optimization occurs, enhancing profitability in both domestic and international markets by 2025 [8].