Shangfeng Cement (000672) Company Research: Beneficiaries of High Prosperity in the Yangtze River Delta
Shangfeng Cement: a regional leader in the layout of East China’s core market.
By the end of 2018, the company has a designed clinker production capacity of 1008 and a cement production capacity of about 1100 tons. More than 70% of the clinker production capacity is located in the Yangtze River region of Anhui.Shares first.
Layout and cost control build core competitiveness and fully enjoy the high prosperity along the river.
The company’s production capacity layout has the advantages of logistics along the Yangtze River and limestone, and it has a wide hinterland downstream.
The company’s cost control ability is excellent, and the cost per ton is the lowest in the East China Cement Enterprise.
We believe that the impact of this downturn in real estate on the business climate will be smaller than in the first two rounds. The core is that the decline in capacity operation rate is relatively limited, and the market pattern along the river has reached a high degree of concentration after several rounds of integration.With strong market control, the market is better able to cope with the worsening of adverse transitions.
The external cement input volume is 杭州夜网论坛 limited, and it is not competitive in the medium and long term.
The strategic expansion can be harvested and diversification is steadily advanced.
As a relatively small regional cement company with a relatively small production capacity, the company has a clear strategy for strategic expansion, strong execution ability, and good management and cost control. The early Xinjiang layout has achieved good results, and its profits have continued to increase.
The company plans to further expand production capacity through new construction and mergers and acquisitions in the main cement industry. Aggregates rely on resource advantages to achieve an annual production capacity of more than 1,000 tons. Environmental protection and the expansion of new business sectors. The expansion of the main business and the extension of 北京夜网 the industrial chain will contribute new growth points in the future.
Earnings forecast and investment recommendations: The regional economic breakthrough keeps a high and medium level shock, transforms the improvement of the profit center and the conversion rate conversion. As a regional cement leader, the company gradually highlights the value of its cash flow, and the potential dividend value is also considerable.
The company has been actively expanding its production capacity and diversification. Regardless of Ningxia’s M & A projects and potential new construction and M & A contributions, we expect the company’s net profit attributable to its parent to be 21 in 2019-2021.
82 and 21.
9.8 billion yuan, corresponding to a price-earnings ratio of 5.
7 and 5.
The company’s outstanding P / E ratio matches the ROE, and the market surplus is the lowest among the southern cement stocks, and it is estimated that it needs to be repaired.
The first coverage was given an “overweight” rating.
Risk reminder: repeated macro policies, worsening of industry competition and cooperation, less-than-expected industrial chain extension, overseas investment risks