Comprehensive review: In 2022, China Resources Cement achieved a total operating revenue of HK $32.219 billion, a year-on-year decrease of 26.7%, a net profit attributable to shareholders of listed companies of HK $1.936 billion, a year-on-year decrease of 75.1%, and a gross profit margin of 15.3%, a decrease of 16% compared with 2021. The company's profits have fallen sharply. In 2023, the company's aggregate production line will be put into intensive production, coupled with the stabilization of cement business, then the business performance is expected to improve. (Note: The currency unit in the following is HKD)
Figure 1 and 2: Revenue of China Resources Cement in 2022, The net profit attributable to the parent company declined
sharply. Data source: cement big data ( https://data.ccement.com/ )
. The revenue of cement and concrete declined.
In 2022, the volume and price of the company's cement business fell sharply, resulting in a sharp decline in the company's overall revenue by 26.7% to 322. At the same time, due to factors such as rising coal prices, the operating cost of China Resources Cement decreased by only 8.5% in 2022 against the background of an 11.4% decrease in cement sales. It was much lower than decline in revenue, resulting in a sharp decline in operating profit, and eventually the profit returned to the mother fell by more than 75% year-on-year, and the gross interest rate fell by 16.8 percentage points year-on-year. Decrease in return on equity 11.
Table 1: Main operating data
of CR Cement for 2020-2022 Data source: Cement Big Data ( https://data.ccement., During the year, the company realized cement clinker business income of 26.948 billion yuan, a decrease of 25.51% over the same period last year; Concrete realized a revenue of 5.3 billion yuan. Year-on-year decline reached 32.
Figure 3 and 4: Revenue of various businesses of China Resources Cement in 2022 and year-on-year, Data source of gross profit margin
over the years: cement big data ( https://data.ccement.com/ )
The volume and price of cement fell. In
2022, China Resources Cement sold 72.11 million tons of cement, a decrease of 11.4% compared with the same period last year. Although the proportion of high-standard cement increased further, the annual average price of cement dropped by 16.8% to 358. Regionally, in 2022, the company acquired 51% of Hunan Liangtian Cement Co., Ltd. Cement sales area increased to eight, in addition to the new Hunan sales area, the remaining seven regions of cement sales have declined in varying degrees, of which Shanxi fell by more than 50%. In 2022, Guangdong and Guangxi are still the two largest cement sales bases of the company, with revenue accounting for more than 70%, and the proportion has continued to increase in recent years. It is worth noting that the sales price of cement in Guangdong and Guangxi in 2022 decreased by 111.8 yuan/ton and 81 yuan respectively. However, the sales volume decreased by 10.
Figure 5 and Figure 6: The cement volume and price of China Resources Cement fell in 2022.
Data source: cement big data ( https://data.ccement.com/ )
From the ton data, In 2022, the average price of cement clinker of Huarun Cement was 358.72 yuan/ton, which was 15.98% lower than that of the previous year, and the comprehensive production cost was 302.16 yuan/ton, which was 7.69% higher than that of the previous year. Among them, the cost of coal per ton of clinker and the cost of electricity per ton of cement increased by 24.9% and 5% respectively. The decrease in price and the increase in cost jointly led to the decrease in gross profit per ton of cement clinker. In 2022, the gross profit per ton of cement clinker of the company was 56.56 yuan. Table 2: Data
of main tons of China Resources Cement in 2022 Source: Cement Big Data ( https://data.ccement.com/ )
20.
As of the end of 2022, the annual aggregate production capacity owned by CR Cement through its subsidiaries is approximately 48.4 million tons. According to the expected production time of the Company's interim report in 2022, about 70 million tons of aggregate production capacity will be released in the second half of 2022, and the release speed of aggregate production capacity is not as expected. In the long run, together with the recently acquired mining rights in Nanning, the subsidiaries of the Company will have a profit outlook of more than 1.
2023 in the next 1-3 years: the aggregate business is expected to be strong, and the profitability is expected to improve
in 2021. CR Cement has re-divided its business into four business segments, namely, basic building materials, structural building materials, functional building materials and new materials. The basic building materials business mainly includes cement and aggregates. In terms of cement, the company acquired Hunan Liangtian Cement, Zhaoqing Jingang Cement and Fengqing Xiqian Cement in 2022. In addition, Wuxuan and Fengkai projects were put into operation one after another, which consolidated the company's market competitiveness in the south. In 2023, the Guangxi Transportation Work Conference proposed to strive to complete the annual plan of highway construction with an investment of 235 billion yuan. In the Guangdong Provincial Conference on High-quality Development, it was proposed that the annual plan of the Great Bay Area Project in 2023 should invest 675.8 billion yuan. The infrastructure construction in Guangdong and Guangxi will form a strong support for the demand for cement, and the cement sales in the company's base camp may recover to a certain extent. In 2022, eight new clinker production lines were ignited in the Guangxi market, which caused a small-scale impact on the market and fierce price competition, which may drag down the revenue and profit of the company's cement business. In terms of aggregates, the company has new projects in Guangxi, Guangdong, Fujian, Hubei and Chongqing in 2022, and it is expected that nearly 70 million tons of aggregate production capacity will be released in 2023. With the production of aggregate projects and the stabilization of cement business, the company's operating performance is expected to improve.
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