Jidong Cement (000401): Performance in line with expectations 19 years expected to benefit Beijing-Tianjin-Hebei demand recovery

Event: On March 20, the company announced its 2018 annual report.

The company achieved operating income of 308 in 2018.

4.9 billion, an increase of 22 per year.

57%; realized net profit attributable to mother 14.

830,000 yuan, a significant increase of 194 throughout the year.

09%; net profit after deduction is 11.

95 ppm, an increase of 1 per year.

1%.

(Comparable caliber adjusted after adjustment every year) In 2018, the company sold 9664 cement and clinker substitutes, surpassing the growth of 5.

6%.

We believe that the annual growth of Jidong Cement and Clinker sales is mainly due to the higher growth rate of new real estate starts in 2018 and the rapid recovery of cement demand in the fourth quarter of the Beijing-Tianjin-Hebei infrastructure.

From the growth rate of cement output announced by the Bureau of Statistics, the cement output of Beijing, Tianjin and Hebei increased gradually in 2018.

5%, 52.

4%, 8.

0%.

Benefiting from the erratic production execution that was gradually made up in 2018, and the national cement price maintained at a high level, the profit recovery of cement in the core areas of the company has clearly recovered. In 2018, the company’s gross profit per ton of cement was 95 yuan.

According to the company’s cement ton data, the price of cement ton in 2018 was 297 yuan, an increase of 56 yuan; due to the increase in raw material prices, the cost of cement ton in 2018 was 202 yuan, with an increase of 30 yuan.

Overall, the company’s gross profit per ton of cement in 2018 was 95 yuan, an increase of 26 yuan per year.

Due to furnace shutdown, labor costs, and transportation costs increased, the company’s cement and clinker ton sales and management costs rose slightly.

In 2018, the company’s cement and clinker ton sales cost was 11 yuan, an annual increase of 1 yuan, mainly due to the increase in transportation 佛山桑拿 handling and labor costs; the cement and clinker ton management cost was 37 yuan, exceeding 3 yuan, mainly due to the kiln lossAnd increased maintenance costs.

The company’s 2018 consolidated net tonnage of cement and clinker was 26.

5 yuan.

The company actively expands the treatment of hazardous solid solid waste.

At present, the company has a total of 7 affiliated enterprises to carry out hazardous waste disposal and disposal capabilities.

5 years / year; 6 subsidiary companies carry out domestic sludge disposal and disposal capacity.

15 is the lowest every year; 2 affiliated enterprises carry out domestic garbage disposal and disposal capacity.

9 every year.

Environmental protection projects cover Beijing, Tianjin, Hebei, Shanxi, Shaanxi, and Northeast China, and serve more than 3,000 customers.

Investment suggestion: demand side. Looking ahead to 2019, we believe that the cement in the Beijing-Tianjin-Hebei region is expected to benefit from the recovery of infrastructure and drive the overall cement demand to resume growth. The prosperity is conducive to continuation.

Since the beginning of 2019, the gradual easing of funds and the restoration of credit environment have provided a good environment for the development of infrastructure, which has accelerated the issuance of special bonds issued by local governments. We believe that infrastructure will gradually pick up in 2019. Against the backdrop of the real estate down cycle, demand for cementCreate better hedges.

Beijing-Tianjin-Hebei integration is also a key focus of government infrastructure. Jidong Cement directly benefits as a regional leader.

On the supply side, the overall supply in the Beijing-Tianjin-Hebei region has not been greatly supplemented, and the regional stock game layout has continued. After the merger of Jidong and Jinyu, the regional concentration has increased significantly and the prosperity has remained.

After the cement asset integration of Jidong and Jinye is completed, the regional duopoly will become a single oligopoly, and the regional pricing power will be further enhanced.

According to data from Digital Cement Network, the production capacity of Jidong Cement and Jinye Group in Beijing-Tianjin-Hebei is 28% and 29% respectively. The combined new company ‘s production capacity in Beijing-Tianjin-Hebei will reach 57%.The right to speak has been significantly improved, which is conducive to maintaining a high regional cement boom.

Based on the revival of regional infrastructure in 2019 to drive demand and the increase in regional internal concentration, we believe that the company’s net profit attributable to mothers in 2019 is 25.

30,000 yuan, given an “overweight” rating.

Risk Warning: 1.

Macroeconomic risks 2. Supply-side reforms fall short of expectations