Comprehensive comment: In the first quarter of 2023, Tapai Group is expected to achieve a net profit of 216-242 million yuan attributable to shareholders of listed companies, a substantial increase of 310% -360% over the same period last year. Benefiting from the growth of cement sales and the decline of coal purchase price, the profitability of the company's main cement industry has increased year on year, coupled with the floating profit of the company's securities investment, the company's first quarter profit has increased significantly year on year.
Figures 1 and 2: Net profit attributable to parent company and net profit deducted from non-attributable to parent company of Tapai Group in the first quarter of 2020-2023 (100 million yuan,%)
Data source: Cement Big Data (https://data.ccement.com/)
Securities investment realized floating profit. In the first quarter of
2023, the net profit of Tapai Group is expected to reach 120-149 million yuan, an increase of 5% -30% over the same period last year. Influenced by the rebound of the stock index, the company's securities investment realized floating profits during the reporting period. It is estimated that the non-recurring gains and losses during the reporting period will reach about 90 million yuan, a significant increase of about 152 million yuan over the same period last year. Finally, the company's net profit attributable to the parent company is expected to increase by 300% -360% to 216-242 million yuan, and the basic earnings per share will increase by more than 250%.
Table 1: Part of Operation Data
of Tapai Cement in the First Quarter of 2021-2023 Data Source: Cement Big Data (https://data.ccement.com/)
Except Securities Income In addition, the profit rebound of the main cement industry is also an important reason for the company's performance growth. The author will discuss the reasons for the profit rebound of the company's main cement industry from three aspects of demand, price and supply. By the end of
2022, the clinker production capacity and cement production capacity of Tapai Group had reached 14.73 million tons and 22 million tons respectively. The main markets of the Company are the eastern Guangdong market and the Pearl River Delta market, enjoying a relatively high market share in the eastern Guangdong market. In the first quarter of 2023, the market demand in eastern Guangdong recovered rapidly, and the cement shipment rate in February-March was higher than that of last year. Even excluding the factors of earlier Spring Festival holidays, the rate of cement shipment in Guangdong rose faster than same period last year, reaching 80% in the eighth week after the Spring Festival, about 20% higher than same period after 2022. Specifically, from January to February, infrastructure investment in Shantou, Chaozhou and Jieyang in eastern Guangdong increased by 46.8%, 14.8% and 56.6% respectively. Thanks to the increase in infrastructure investment, coupled with the weather conditions around the country, the company's cement sales in the first quarter increased slightly year-on-year.
Figure 3: Cement shipment rate in Guangdong after the Spring Festival in 2020-2023 (%)
Data source: Cement Big Data (https://data.ccement.com/)
(2) The cost of cement production decreased.
Figure 4: Cement price in Guangdong in the first quarter of 2023 is still lower than same period last year (yuan/ton) Figure 5: Coal price trend in Guangdong in 2020-2023 (yuan/ton)
Data source: Cement big data (https://data.ccement.com/) 0 HTM L0 UNK2 1 (III) The implementation of off-peak shutdown is good, and the overall storage level is not high in the middle and last ten days of the first quarter 0 HTML0 UNK2 2 According to the off-peak production schedule in 2023 issued by Guangdong Cement Association, the off-peak shutdown days in Guangdong from January 1 to April 30, 2023 are 50 days. In the first quarter, the implementation of peak-staggered production in Guangdong was in place, and the overall clinker storage of enterprises in the middle and late ten days was not high, which provided a strong condition for stabilizing the cement price in the eastern Guangdong market. 0 HTML0 UNK2 3 Figure 6: The overall clinker storage in Guangdong is not high in the middle and last ten days of the first quarter of 2023 (%) 0 HTML0 UNK2 4 Data source: Cement Big Data (https://data.ccement.com/) 0 HTML0 UNK2 5 Outlook for the whole year: Infrastructure brings strong support. The performance is expected to be repaired by 0 HTML 0 UNK2. The annual planned investment of Guangdong's key projects in the 62023 year is about 1 trillion yuan, an increase of 100 billion yuan over 2022. In 2023, the General Office of the Guangdong Provincial People's Government issued the Action Plan for Guangdong's Financial Support for High-quality Economic Development in 2023, which mentioned that in 2023, about 1.5 trillion yuan of financing will be provided for the steady and healthy development of infrastructure, major projects and real estate. It is expected that Guangdong's infrastructure projects will continue to develop in 2023, bringing strong support to the cement demand of the company's main market. In addition, in 2023, Guangdong plans to stagger peak production and shut down kilns for a tentative period of 80 days/kiln, an increase of 20 days compared with 2022. If the industry synergy progresses smoothly, the cement price in Guangdong is expected to rise steadily. 0 HTML0 UNK2 7 2023 Tapai Group will speed up the construction progress of the project of co-processing solid waste in cement kilns and actively promote the development of new industries. In 2022, all the photovoltaic power generation projects within the red line of the company's subsidiaries have been put into operation, which can effectively cope with the rise in electricity prices and reduce the impact of high coal prices. At the same time, the Company will carry out the feasibility study on the reinforcement of the steel structure shed in the plant area for the construction of distributed photovoltaic and the construction of centralized photovoltaic in the leased site, and strive to gradually expand the construction scale of photovoltaic power generation projects, which is conducive to further reducing costs and improving the profitability of the Company. In 2023, the company plans to reduce the securities investment quota by 20% compared with 2022. The company will strengthen investment risk management. It is expected that the performance of Tapai Group will be restored in 2023, and the stability of performance will be improved. 0 HTML0 UNK2 8 (This article does not constitute investment advice) 0 HTML0 UNK2 9
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