During the reporting period, the company achieved operating income of 15.996 billion yuan, a year-on-year increase of 0.07%; attributable net profit of 1.222 billion yuan, a year-on-year increase of 3.47%; cash dividends of RMB 1.7 (including tax) were paid for every 10 shares.
1. The industry is in a sluggish economy and performance slightly increased, and profitability slightly improved: real estate continued to decline in 2014, and industry demand was weak throughout the year. At a time when the entire cement industry was bleak, the company's performance slightly increased in reasonable expectations. The main reasons for the company's performance decline in the fourth quarter were that the cement price rose significantly at the end of 2013 and the base was relatively high; the second was that the cement price in the two lakes fell sharply at the end of 2014. Judging from the annual ton indicator, the profitability of companies as leading regional market enterprises has slightly improved.
2. The regional supply and demand pattern is stable, and the beautiful performance of overseas projects is worth paying attention to: From the supply side, we can see that Hubei has achieved zero growth in new production capacity for two consecutive years, and only two production lines in Hunan have been put into production in the two lakes. It is expected that the supply and demand pattern of the main regional markets in which the company is located will remain stable in the future. The company's overseas market performance is beautiful. The 3000d/t production line established in Tajikistan has been successfully put into production. In addition, two production lines will be added in the future, and the Cambodian production line has also entered trial production. Overseas business not only provides sales increment, but also has a much higher profit level than domestic ones.
3. Continue to make great strides on the road of environmental protection transformation, and new highlights of future growth: the company continues to accelerate the coordinated development of environmental protection business and cement main business. In 2014, the annual disposal capacity of environmental protection business reached 4.46 million tons, an increase of 74% year-on-year in 2013. Environmental protection is still the focus in 2015. In addition to ushering in the golden development period, environmental protection business is expected to drive the company's performance growth, it will also help further improve the company's fuel cost structure and give full play to the advantages of industrial chain coordination.
Investment advice: Maintain the "cautious increase in holdings" rating: The Hubei market, where the company is located, still maintains a good supply pattern (small new supply, high concentration, and large enterprises have strong control over the market); it is worth mentioning that the company is the first company in China to enjoy the dividends of building a factory overseas (the Tajikistan project has been operated stably and the profit margin is very high). The company will continue to make overseas layout in the next few years; the company continues to invest in environmental protection business, although it is limited by the current policy subsidy, but its benefits are in the current and long-term. Cement demand will be in the bottoming stage in 2015, and there will still be certain downward pressure in the short term. We expect the company's EPS from 2015 to 2017 to be 0.87, 1.08 and 1.22 respectively. Considering that the company's competitiveness continues to strengthen and its future development potential is still relatively large, we maintain the "cautious increase in holdings" rating.
Risk warning: The macro economy continues to decline, new production capacity exceeds expectations, and raw material prices have risen sharply.
