Beixin Construction Materials (000786) : Performance in line with expectations, is expected to grow steadily in 2013

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1, the fourth quarter gross profit margin increased significantly. From a single quarter of operation, the fourth quarter of the company's revenue of 1.77 billion yuan, an increase of 7.8%, slightly better than the growth rate of 6% in the third quarter. The gross profit margin in the fourth quarter was 30.8%, an increase of 3.5 percentage points compared with the third quarter. Considering the background of the fourth quarter increase in scrap prices, we believe that the increase in gross profit margin in the fourth quarter is more due to the scale effect caused by the expansion of production capacity. In addition, the fuel price is also an important reason, the Bohai Sea coal price all the way down in 2012, from 800 yuan/tonnage down to the current 620 yuan/ton.

2. The revenue growth of gypsum board is slowing down. In terms of business, the company's gypsum board business achieved revenue of 5.55 billion yuan in 2012, an increase of 18%, and the growth rate was 17 percentage points lower than that in 2011. Overall, the continuous real estate regulation government in 2012 is the main reason for the decline in the growth rate of gypsum board business revenue. In 2012, the company's gypsum board reached 1.65 billion square meters, becoming the world's largest business group; In terms of sales, the sales volume of gypsum board in 2012 was 1.05 billion square meters, an increase of 20% year-on-year. In terms of product structure, the capacity ratio of Dragon Brand and Taishan gypsum is 1:2. Taishan continues the strategy of full production and full sales, while Dragon brand implements the high-end market strategy.

3, 2013 cost end pressure is not big, pay attention to sales changes. From the point of view of the cost of gypsum board, the ratio of expanding paper is about 43%, the veneer paper industry on the one hand overcapacity, on the other hand, the price of waste is not big. Desulphurized gypsum accounted for 30%, fuel and electricity accounted for 10% and 5% respectively, fuel, considering the weak macroeconomic recovery is expected, the price fluctuation may be relatively small. In 2013, the cost end basically remained stable/slightly decreased, and the change in sales volume became the most important indicator to track the company.

4, real estate regulation and control of gypsum board sales expectations, affecting the industry prosperity. In 2013, with the introduction of a new round of "National Five", the real estate industry is facing increased variables, building materials as a strong related industry of real estate, gypsum board sales also have greater uncertainty. Gypsum board sales on the one hand depends on the newly started real estate projects, on the other hand, the proportion of secondary decoration is also gradually increasing.

5, performance forecast and rating. It is expected that the company's EPS in 2013-2014 will be 1.42 yuan and 1.71 yuan respectively, and the corresponding valuation will be 12 times and 10 times respectively, giving the "recommended" rating. (Guodu Securities)

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