HUAXIN BUILDING MATERIALS GROUP(SH:600801) Minsheng Securities·2024-04-29 02:30Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 14.72 yuan [7]. Core Views - The company reported a revenue of 7.084 billion yuan in Q1 2024, a year-on-year increase of 6.87%, while the net profit attributable to shareholders was 177 million yuan, a decrease of 28.43% year-on-year [2]. - The domestic cement business is under pressure due to increased rainfall, weak real estate investment, and insufficient infrastructure project commencement, leading to a national cement price drop of 15.40% year-on-year [3]. - The company has seen significant structural contributions from aggregates and overseas cement production capacity, benefiting from lower coal prices and increased overseas joint venture earnings [4]. - The financial expenses have notably impacted overall performance, with a financial expense of 182 million yuan in Q1 2024, up from 68.57 million yuan in the same period last year, primarily due to exchange rate losses [5]. - The company aims for a mid-term target of 50 million tons of overseas production capacity, focusing on high-profit regions to enhance competitiveness [6]. Summary by Sections Financial Performance - Q1 2024 revenue was 7.084 billion yuan, with a gross margin of 21.89%, up 1.66 percentage points year-on-year but down 5.82 percentage points quarter-on-quarter [2]. - The net profit margin was 4.12%, a slight decrease of 0.15 percentage points year-on-year [2]. - The company expects net profits attributable to shareholders for 2024-2026 to be 2.817 billion, 3.337 billion, and 3.777 billion yuan, respectively, with corresponding PE ratios of 11x, 9x, and 8x [6]. Market Conditions - The domestic cement market is facing challenges with a national cement production of 33.684 million tons in Q1 2024, a year-on-year decrease of 16.28% [3]. - The average national cement price fell to 362 yuan per ton, with significant declines in various regions, indicating a worsening supply-demand imbalance [3]. Strategic Outlook - The company is focusing on optimizing supply-side structures domestically while expanding efficient production capacity overseas [6]. - The report highlights the company's proactive overseas expansion and commitment to low-carbon and environmentally friendly practices, positioning it favorably against peers amid slowing domestic real estate and infrastructure demand [6].