HUAXIN CEMENT(600801) 国金证券·2025-02-28 06:55Investment Rating - The report gives a "Buy" rating for the company with a target price of 15.51 RMB based on a 13x valuation for 2025 [3]. Core Viewpoints - The company is well-positioned for growth in overseas markets, particularly in Africa, South America, and the Middle East, benefiting from its early entry and flexible decision-making [2][3]. - The company has diversified its business structure, with concrete and aggregate contributing nearly 50% to gross profit, and has made significant strides in low-carbon initiatives [3][11]. - The company’s revenue is expected to grow steadily, with projected revenues of 343.96 billion RMB, 384.64 billion RMB, and 422.68 billion RMB for 2024-2026, reflecting growth rates of 2%, 12%, and 10% respectively [3][6]. Summary by Sections Company Overview - Founded in 1907, the company specializes in cement, aggregates, and concrete, with a strong domestic presence in Hubei and Hunan provinces and international operations in Africa and the Middle East [1][11]. - In the first three quarters of 2024, the company achieved revenues of 24.719 billion RMB, a year-on-year increase of 2.3%, while net profit attributable to shareholders was 1.138 billion RMB, a decrease of 39.3% [1]. Overseas Expansion - The company has established a significant overseas presence, with a cement grinding capacity of 22.54 million tons and a clinker capacity of 15.44 million tons as of 2024H1, aiming for a total capacity of 50 million tons in the medium to long term [2][30]. - The company is actively acquiring quality assets in Nigeria and Brazil, with Nigeria being a key market due to its high economic potential and favorable market structure [2][33]. Domestic Market - The company has strengthened its domestic market position, with concrete and aggregate contributing nearly 50% to gross profit, and has been proactive in low-carbon development since 2021 [3][11]. - Despite a downward trend in domestic cement demand, the company has managed to maintain revenue growth through diversification and international expansion [3][18]. Financial Projections - The company’s revenue projections for 2024-2026 are 343.96 billion RMB, 384.64 billion RMB, and 422.68 billion RMB, with corresponding net profits of 21.01 billion RMB, 24.80 billion RMB, and 31.17 billion RMB [3][6]. - The report anticipates a decline in net profit for 2024, followed by a recovery in subsequent years, with growth rates of -24%, 18%, and 26% for net profit from 2024 to 2026 [3][6].