TSC(SZ:000877) Guotai Junan Securities·2024-03-31 16:00Investment Rating - The report maintains a "Buy" rating for Tianshan Cement (000877) with a target price of 8.82 CNY, down from the previous forecast of 10.51 CNY [1][2]. Core Insights - The cement sales remain weak, but cost reduction and efficiency improvements have led to a recovery in profitability. The company reported a 19% year-on-year decline in revenue for 2023, with a net profit attributable to shareholders of 5.85 billion CNY, down 78.37% year-on-year, which aligns with market expectations [1][2]. - The company faced increased competition in the cement market, leading to a downward adjustment of the EPS forecast for 2024-2025 to 0.20 CNY and 0.23 CNY respectively [1][2]. - The report highlights that the company, as an industry leader, sacrificed some sales to maintain supply-demand balance in various regions [1][2]. Financial Summary - In 2023, Tianshan Cement achieved a cement sales volume of approximately 26 million tons, a year-on-year decrease of 3%, which is less than the industry average decline of 7% [1][2]. - The average selling price for Q4 was estimated at 245 CNY per ton, with a gross profit of 44 CNY per ton, showing a quarter-on-quarter improvement [1][2]. - The financial forecast indicates a revenue of 107.38 billion CNY for 2023, with projected revenues of 115.1 billion CNY and 118.3 billion CNY for 2024 and 2025 respectively [2][3]. Valuation Metrics - The report provides a comparison of valuation metrics with peer companies, indicating Tianshan Cement's PB ratio at 0.7263 and EPS for 2023 at 0.13 CNY, with an expected increase to 0.29 CNY in 2024 [5][6]. - The report also notes a significant decline in profitability metrics, with a net profit margin of 1.8% in 2023, down from 5.6% in 2022 [2][3].