Minsheng Securities·2024-04-28 11:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating a solid position in the market despite current challenges [4][5]. Core Views - The company reported a revenue of 21.328 billion yuan in Q1 2024, a year-on-year decrease of 32.08%, with a net profit attributable to shareholders of 1.502 billion yuan, down 41.14% year-on-year [1]. - The cement industry faced a decline in both volume and price in Q1 2024, influenced by increased rainfall, weak real estate investment, and insufficient infrastructure project commencement [2]. - The company’s gross margin improved by 1.25 percentage points year-on-year to 17.75%, attributed to lower coal prices and structural support from aggregate and overseas businesses [2][4]. Summary by Sections Financial Performance - In Q1 2024, the company’s net profit margin was 6.41%, slightly down from 6.87% in the same period last year [1]. - The company’s operating cash flow was 160 million yuan, with total monetary assets at 66.3 billion yuan and short-term borrowings reduced to 3.84 billion yuan from 4.48 billion yuan at the beginning of the period [3]. Industry Analysis - The national cement production in Q1 2024 was 33.684 million tons, a year-on-year decrease of 16.28%, with the average national cement price at 362 yuan per ton, down 15.40% year-on-year [2]. - The report anticipates a gradual improvement in infrastructure demand due to government initiatives, including the issuance of special bonds for local governments [4]. Future Outlook - The company is expected to achieve net profits of 10.266 billion yuan, 10.868 billion yuan, and 11.742 billion yuan for the years 2024, 2025, and 2026 respectively, with corresponding PE ratios of 12x, 11x, and 10x [4][5]. - The report suggests that the cement industry is currently at a relatively low point, but the company’s leading position and competitive advantages are expected to support its recovery [4].