Jidong Cement (000401): The fourth-quarter operation slightly exceeded expectations and the 19-year performance will be more beautiful

Jidong Cement (000401): The fourth-quarter 天津夜网 operation slightly exceeded expectations and the 19-year performance will be more beautiful

Event: The company disclosed its 2018 annual report, which reported an operating income of 308.

4.9 billion, an increase of 22 over the same caliber of the previous year.

6%, achieving net profit of return to mother 14.

8.3 billion, a year-on-year increase of 194.

1%, the basic profit income is 1.

101 yuan.

The company plans to distribute a cash dividend of 4 yuan (including tax) to all shareholders for every 10 shares.

Opinion: Strong regional demand drives both volume and price up, and the performance in the fourth quarter was slightly better than expected.

The company achieves at least 9664 cement and clinker, +5 per year.

6%, the average price per ton is 291 yuan, ten years +44 yuan, gross profit per ton is 89 yuan, and ten years is +22 yuan.

Among them, Q4 benefited from the start of regional infrastructure demand and the easing of winter construction restrictions. The price of Beijing-Tianjin-Hebei cement ushered in contrarian growth in the off-season, and the company’s Q4 single-quarter sales increased.

4%, the average price per ton in a single season is expected to increase by about 20 yuan / ton.

The net profit per ton (excluding investment income) has increased by 13 yuan per year, and cash flow has improved significantly.

(1) Three tons of expenses in advance 61.

6 yuan, an increase of 3 per year.

2 yuan, mainly repair costs in management costs (multiple +1.

8.2 billion), downtime losses (+1 in ten years).

89 million, related to the increasing number of days of centralized kiln shutdown).

Impairment accruals are additional and sufficient, increasing by 0 each year.

69 million US dollars, mainly due to the increase in the impairment losses of fixed assets of the northern subsidiary.

(2) Initial confirmation of investment income of 64.24 million yuan, greatly improved, mainly due to the increased profitability of Shaanxi joint ventures, Q4 single-quarter investment income decreased significantly from the previous quarter, mainly due to the joint venture Jindong Jidong (Tangshan) Concrete Environmental Protection TechnologyThe impact of the large amount, the investment income in 2019 will be greatly improved.

(3) Net profit per ton (excluding investment income) at the beginning of the year reached 25.

8 yuan, a year increase of 13.

4 yuan in the fourth quarter, the proportion of minority shareholders’ profit and loss in the fourth quarter is higher than that in the third quarter by 31 pct. The reset is due to the decrease in Q4 investment income and the impact of impairment provision, and may be relatively stable with the consolidation of environmental protection subsidiaries such as Beijing Mangrove Forestrelated.

(4) Net cash flow from operating activities increased by 30.

0 ppm to 65.

3 trillion, of which management optimization promoted the reduction of the operating net working capital scale and gradually increased the net cash flow of approximately 16 trillion.

The company’s asset-liability ratio decreased by the end of the year.

5 points to 61.

6%.

The Pan-Beijing-Tianjin-Hebei cement market is off to a good start and regional price hubs are expected to continue to rise.

Cement demand in the Beijing-Tianjin-Hebei region continued to pick up strongly in the 1-2 months, environmental protection binding constraints continued to tighten, and subsequent price elasticity increased.

The company’s full-year sales in 2019 are expected to increase by 7%, driven by the growth in demand from northern cement. The price will continue to rise steadily on the basis of the beginning of the year. The average average price in 2019 is expected to increase by 18 yuan, and the net profit per ton will reach more than 40 yuan.
Investment suggestions: (1) The demand potential of Beijing-Tianjin-Hebei cement is large, and the capacity of the Beijing-Tianjin-Hebei regional cement market is expected to expand by 20%.

In “Xiong’an Bonds” in 2018, the issuance of relevant local debts, strengthened capital security, regional infrastructure investment and cement demand continued to accelerate.

(2) The “blue sky defense war” imposes strong supply constraints. Air quality in Beijing, Tianjin, Hebei, and surrounding areas ranks at the bottom of the country. Environmental protection tasks are heavy, and throughput is subject to rigid constraints on air pollution control.

(3) After the merger of Jidong Jinyu, the market synergy effectiveness and the effective average of internal management have improved. Tangshan and Jilin’s cement platform companies will officially operate and the layout will be more optimized.

(4) Based on the better-than-expected performance of the average price index for the four seasons, we raised our profit forecast and expect the company’s net profit attributable to its mothers to be 25 in 2019-2021.90, 35.

05, 39.

4.5 billion, corresponding to a price-earnings ratio of 8.

9,6.

6,5.

8x, maintain “Buy” rating.

Risk Warning: Repeated macro-policy, environmental protection loosened more than expected, and market competition and cooperation deteriorated.