On March 31, Hainan Ruize released its annual report for 2022. According to the report, in 2022, the Company realized 193292 of operating income of RMB 0.08 million, a decrease of 30.43% over the same period last year, and realized net profit attributable to shareholders of the Company of RMB -493.7262 million, a decrease of 56.72% over the same period last year. The output of commercial concrete
in Hainan Province in 2022 decreased by 12.2% over the previous year. In 2022, due to the weakening of market demand, environmental warning, shortage of funds and other factors, the utilization rate of concrete production capacity declined. At present, the company has 10 commercial concrete mixing stations and 26 production lines in Hainan Province, with a design capacity of 7.8 million cubic meters and a capacity utilization rate of 27.06% in 2022. It covers major cities and counties in Hainan Province, including Haikou, Sanya, Qionghai, Lingshui, Chengmai and Danzhou. The market share of the company's commercial concrete business is about 20%, and the location advantage is significant. In 2022, the production and sales volume of commercial concrete products of the Company was 2,110,665.35 m ³, representing a decrease of 19.29% as compared with the same period of last year. The main raw materials of the company's
commercial concrete are cement, sand and stone. The cement market in Hainan Province is relatively closed due to the limitation of geographical location. During the reporting period, the overall price of cement rose slightly. In addition, during the reporting period, the supply of sand and stone in the regional market was tight due to the impact of environmental control, and the price also generally rose. In order to reduce the adverse impact of raw material price fluctuations on the company, during the reporting period, the company's 10 mixing stations through centralized procurement, unified allocation, so as to gain more voice in the price game. At the same time, the company pays close attention to the changes in the raw material market, inquires in many ways, expands the purchasing channels of raw materials, reduces the purchasing cost, and minimizes the impact of raw materials on the gross profit rate of the company. The
report also shows that
in 2022, real estate development fell short of expectations, and the national real estate development investment fell by 10% year on year, but as the state issued various favorable policies to accelerate the recovery of infrastructure, the national fixed asset investment (excluding farmers) increased by 5.1% year on year. Infrastructure investment grew by 9.4% year-on-year, and in the long run, there is still demand for building materials such as commercial concrete. (Data source: National Bureau of Statistics) In the next few years, the country will accelerate the construction of major projects and infrastructure, the national infrastructure investment will continue to maintain a growth trend, and the national affordable housing, education investment, ecological environment investment and other livelihood projects will bring new demand for the commercial concrete industry. But on the other hand, in recent years, the development of commercial concrete industry itself is facing many problems, most of the commercial concrete enterprises are at the bottom of the value chain, the phenomenon of product homogeneity is serious, the overall overcapacity brings vicious competition at the cost of reducing prices. At the same time, the price of raw materials such as cement and sand has risen, resulting in higher procurement costs. The overall construction period of the industry is long, the settlement period is long, and the increasing financial pressure of the commercial concrete industry makes the operation of the industry more difficult. The combined effect of the above factors is easy to have a negative impact on the commercial concrete industry, which poses a severe challenge to the future development of the commercial concrete industry. The
report also shows that by the end of 2022, the total accounts receivable of Hainan Ruize was 1.72 billion yuan, accounting for 37.82% of the total assets, an increase of 8.53% over the same period last year. In the
report, Hainan Ruize expressed the reasons for the large amount of accounts receivable and the countermeasures:
the company's commercial concrete business has a long construction cycle and a long settlement cycle, the downstream construction units are under great pressure of working capital turnover, and the default of commercial bills is frequent; Landscaping business needs to advance funds in the early stage, and the local government payment approval process is long, and the project progress payment settlement is slow. Influenced by the industry and business model of the commercial concrete business and landscaping business, the Company had a relatively high balance of accounts receivable as at the end of the reporting period, which may bring pressure on the Company's working capital turnover and the impact of provision for bad debts on the Company's net profit.
Response measures: The Company has made provision for asset impairment losses and credit impairment losses in accordance with the Accounting Standards for Business Enterprises, strictly implemented accounting policies and controlled relevant risks.
① For the accounts receivable of concrete business, during the reporting period, the concrete business segment (including branches, subsidiaries and entrusted management companies), as the plaintiff, added 85 new litigation cases, involving a total amount of 221.3675 million yuan. In the future, the company will continue to enhance the application of legal means and speed up the repayment through litigation.
② For the landscape engineering project funds, the Company will speed up the withdrawal of funds, reduce liquidity risk and ensure the stable operation of the Company by strengthening the project settlement and speeding up the acceptance and handover.
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