qscc(600425) 光大证券·2024-05-06 01:03Investment Rating - The report maintains a "Buy" rating for the company [2][19]. Core Views - In 2023, the company achieved rapid growth in both its cement and chemical businesses, benefiting from active regional economic conditions that boosted downstream demand. However, the profitability of the chemical business significantly declined due to falling product prices. The net profit forecasts for 2024 and 2025 have been adjusted downwards to CNY 600 million (down 17%) and CNY 730 million (down 20%), respectively, with a new forecast of CNY 890 million for 2026. The company is expected to continue benefiting as a leading cement producer in Xinjiang, where infrastructure demand remains high [1][19]. Summary by Sections Financial Performance - In 2023, the company reported revenues of CNY 4.5 billion, a year-on-year increase of 20%, and a net profit of CNY 460 million, up 12% year-on-year. The fourth quarter of 2023 saw revenues of CNY 920 million, a 137% increase year-on-year, but a net loss of CNY 45 million, a decline of 366% year-on-year [8][25]. Cement Business - The cement segment generated revenues of CNY 3.3 billion in 2023, reflecting a 24% increase year-on-year, with sales volume reaching 8.17 million tons, up 36% year-on-year. The average price per ton of cement was CNY 405, down CNY 39 year-on-year. The gross margin for the cement business remained stable at 34% [20][19]. Chemical Business - The chemical segment achieved revenues of CNY 840 million in 2023, a 9% increase year-on-year, with sales volume of 240,000 tons, up 35% year-on-year. However, the average price per ton dropped to CNY 3,479, down 19% year-on-year, leading to a gross margin of -8.8%, a decline of 13.3 percentage points year-on-year due to significant price drops [9][19]. Profitability and Valuation - The company’s projected net profits for 2024 and 2025 are CNY 600 million and CNY 730 million, respectively, with a new estimate of CNY 890 million for 2026. The current price corresponds to a dynamic P/E ratio of 10x for 2024 [1][27].