Shangfeng Cement (000672): Q1 performance exceeded initial expectations

Shangfeng Cement (000672): Q1 performance exceeded initial expectations

The Q1 performance exceeded expectations, and the stock investment income increased sharply. On April 12, Shangfeng Cement released the first-quarter performance forecast for the year of 19. It is expected that the net profit attributable to mothers will be achieved in 19Q3

700 million, + 111% year-on-year?
123%, which exceeded our expectations and the market, mainly due to (1) the company’s cement product volume and price rose; (2) the company’s investment in the secondary market stocks rose in the first quarter and the appreciation of value added brought investment income growth.
We estimate that the stock investment income of the company in 19Q1 was 8,631 million, which accounted for 24% of the median net profit of the return to the mother; net income of the mother after deducting the investment income of the stock2.


80,000 yuan, + 59% year-on-year?
71%, still achieving rapid growth.

We expect the company’s EPS to be 2 in 2019-2021.



71 yuan with a target price of 15.



62 yuan, maintain “Buy” rating.

The social financial data in March surpassed expectations, and the improvement of the credit / PMI dual verification requirements. Following the statistics of the Bureau of Statistics a week ago, the construction PMI rose to 61 in March.

At 7%, the new construction orders index rose to 57.

9%, the demand side accelerated the improvement; the financial data for March released today is much larger than expected, which supplements the social finance2.

86 trillion, an increase of more than one year.

28 trillion, a 10-year growth rate of 10 years at the end of March.

7%, M2 exceeded the growth rate of 8.

6%, which is an increase of 0 from the previous month.

6 points.

Credit and PMI data together verify that actual demand has improved significantly.

The Yangtze River Delta has resumed work well, and sales have increased in 19Q1. According to our research in the Yangtze River Delta at the end of February, despite the impact of rainy weather, the local company replacement volume is at 80%.Company 1?
Cumulative sales in February still increased by about 5%.

In March, after the weather improved, the company’s release situation gradually recovered. According to the Digital Cement Network, the cement conversion rate in East China was from 37 on March 1.

3% increase 61pct to 98 on March 29th.

3%, the average March yield is 75.

9%, higher than the same period last year.

5 points.

At the end of March, the cement storage capacity ratio in East China was 59.

3%, lower than the beginning of the month 7.


In this case, the company’s 19Q1 sales have increased.

In 19Q1, the price of cement in the Yangtze River Delta was higher than that of the same period of last year. Starting in the peak season of April, the price started in late March. The market demand returned to normal, inventory fell, and cement prices stabilized and rebounded.

According to Digital Cement Network, taking the high standard cement price in Zhejiang as an example, the average price in 19Q1 was 491 yuan / ton, which was 38 yuan / ton higher than the average price of 453天津夜网 yuan / ton in the same period last year.
Since April, the cement market demand has officially entered the peak season, and the cement shipments of all enterprises have achieved production and sales balance. The second round of enterprises has pushed up the price of clinker.

According to the Digital Cement Network, on April 8, the price of cement in Shanghai, Nantong and Suzhou, Wuxi and Changzhou will be raised by 20-45 yuan / ton; from April 9, the price of cement in Hangzhou-Shaoxing area will be increased by 30 yuan / ton.

The main reasons are: 1) the weather has improved, the company’s daily delivery performance is good, and the enterprise’s market confidence has increased; 2) the clinker price has been raised, which will lead to the adjustment of the cement price increase.

Maintaining a “Buy” rating The company’s main production capacity is distributed in the Yangtze River Delta region. We remain optimistic about the supply and demand layout of the Yangtze River Delta cement market in 19 years. After solving the impact of the 18-year safety production problem, the company is expected to increase volume and price in 19 years.

We maintain our previous profit forecast and expect the company’s net profit attributable to its mothers to be 19 to 21 years respectively.


100 million, a year-on-year increase of +20.

7% / 12.

6% / 10.

3%, target price 15.


62 yuan, maintain “Buy” rating.

Risk warnings: accidents in production safety, macroeconomic growth exceeding expectations, raw material prices surpassing expectations, etc.