HUAXIN CEMENT(600801) 光大证券·2024-12-18 05:40Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has acquired 100% equity of EMBUS.A.ENGENHARIAECOMÉRCIO in Brazil for approximately USD 186.6 million, marking its entry into the South American market [1] - The acquisition is a strategic move to expand the company's overseas operations and mitigate the impact of declining domestic demand in the building materials market [4][6] - The target company has an annual aggregate production capacity of 8.8 million tons and reported a net profit of approximately USD 17.13 million in 2023 [1][6] Summary by Sections Acquisition Details - The acquisition involves the purchase of two companies: 100% of Company A and 40% of Company B, with a total consideration of USD 186.6 million, subject to adjustments based on cash and working capital at closing [1] - The target company B operates four aggregate plants in São Paulo, Brazil, with a strategic location and rich resource reserves [1][6] Financial Performance - The target company reported net assets of USD 6.943 million as of December 31, 2023, with a historical profit trend showing increasing contributions to the parent company's net profit [1] - The projected net profit for the company is expected to decline in 2024 due to reduced demand in the real estate sector, with estimates of CNY 2.009 billion for 2024 [7] Market Position - The company has established a significant overseas presence, with operations in 12 countries and an overseas revenue share of 23%, which is leading among domestic cement companies [5][7] - The entry into the Brazilian market is seen as a milestone for the company, leveraging its experience in integrating acquired businesses to enhance performance and investment returns [6][7]