Haitong Securities·2024-03-20 16:00Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1]. Core Views - The report highlights that the company's cement market share has slightly increased, while profitability continues to decline. The company reported a revenue of 141 billion yuan in 2023, a year-on-year increase of 6.8%, but a net profit of 10.4 billion yuan, a decrease of 33.4% year-on-year [6][7]. - The report anticipates that the cement industry may benefit from self-discipline and government initiatives, which could stabilize investments in real estate and infrastructure, leading to a gradual recovery in market conditions [8]. Summary by Sections Financial Performance - In 2023, the company achieved a total revenue of 141 billion yuan, with a net profit of 10.4 billion yuan, resulting in an EPS of 1.97 yuan. The fourth quarter of 2023 saw a revenue of 42 billion yuan, down 10.2% year-on-year, and a net profit of 1.8 billion yuan, down 45.8% year-on-year [6][7]. - The company plans to distribute a dividend of 0.96 yuan per share, with a payout ratio of approximately 48.6% [6]. Cement and Clinker Business - The company sold 293 million tons of cement clinker in 2023, with self-produced sales of 285 million tons, a year-on-year increase of 0.7%. The average price per ton of cement clinker decreased by 48 yuan to 273 yuan [7]. - The cost per ton of cement clinker decreased by 25 yuan to 205 yuan, contributing to a gross profit margin of 68 yuan per ton, down 22 yuan year-on-year [7]. Other Business Segments - The aggregate business saw significant growth, with revenues of approximately 3.9 billion yuan, a year-on-year increase of 73%. The gross margin for this segment was 48.32%, although it decreased by 11.98 percentage points year-on-year [7]. - The concrete business generated revenues of 2.3 billion yuan, a year-on-year increase of 24.71%, with a gross margin of 11.00% [7]. Cost and Profitability - The company's per ton expenses increased slightly by 2 yuan to 38 yuan, with net profit per ton decreasing by 19 yuan to 38 yuan [8]. - The report projects EPS for 2024, 2025, and 2026 to be approximately 1.87, 2.12, and 2.33 yuan, respectively, with a target PE ratio of 13-14 times for 2024, leading to a fair value range of 24.31 to 26.18 yuan per share [8]. Capital Expenditure and Future Plans - The company plans to increase capital expenditures to 15.2 billion yuan in 2024, focusing on project construction, energy-saving upgrades, and acquisitions [11]. - The report indicates that the company is well-positioned for future growth through expansion in both upstream and downstream operations [10].