Comprehensive review: In the first half of 2023, Tianrui Cement achieved an operating income of 3.999 billion yuan, a year-on-year decrease of 24.85%, and a net profit attributable to shareholders of listed companies of 151 million yuan. The return on equity was 0.91%, down 1.88 percentage points from the same period last year. In the first half of this year, affected by the decline in the overall prosperity of the cement industry, the volume and price of Tianrui Cement's main business fell, and the decline in revenue was more obvious. At the same time, as the cost reduction is less than selling price, the comprehensive gross profit rate of Tianrui Cement has further declined, coupled with the high proportion of expenses during the period, the total profit has been substantially withdrawn.
Figures 1 and 2: Revenue and net profit attributable to parent company of Tianrui Cement in the first half of 2023 (unit: 100 million yuan,%)
Data source: cement big data (https://data.ccement.com/)
cement, In the first half of
2023, major markets such as Henan and Liaoning, where Tianrui Cement is located, were dragged down by the decline in real estate construction volume. The overall demand for cement clinker showed a shrinking trend, and the price competition among enterprises intensified significantly. In this context, the volume and price of Tianrui Cement's cement clinker business fell, which was the main reason for the decline in revenue and profit in the first half of the year. Among them, the main product cement sales totaled 12 million tons, a decrease of 10.5% compared with the same period last year, and the average selling price dropped to about 256 yuan/ton, down 20.6% compared with the same period last year. Meanwhile, the export volume of clinker dropped to 700000 tons, only half of the same period last year, with an average selling price of about 269 yuan/ton, down 17.8% year-on-year. Overall, the revenue of Tianrui Cement's cement clinker business dropped to 3.266 billion yuan, down 31.80% from the same period last year, due to the decline in sales volume and the decline in prices.
In addition, thanks to the commissioning of the new aggregate production line last year, the scale of Tianrui cement aggregate business expanded further in the first half of 2023, with sales reaching 21.5 million tons, an increase of 55.4% over the previous year, and a total contribution of 732 million yuan, an increase of 37.58% over the previous year, accounting for 18.32% of the total revenue. Compared with the same period last year, it increased by 8.31 percentage points.
Under the background of weak industry prosperity, the aggregate business brought by the extension of industrial chain has become the only performance growth point of Tianrui Cement in the first half of the year, but due to its relatively small scale, it is difficult to change the downward trend of total revenue. In the first half of 2023, Tianrui Cement achieved a total operating income of 3.999 billion yuan, down 24.85% from the same period last year. Figure
3 and Figure 4: Sales volume and selling price of cement and clinker of Tianrui Cement in the first half of 2023 (unit: 10,000 tons, yuan,%)
Data source: Cement big data (https://data.ccement.com/)
The decrease of cost is less than selling price. In the first half of
2023, the price of raw materials and fuels in the cement industry generally dropped, and the unit cost of Tianrui Cement was lower than that of the same period last year. However, due to the more obvious decline in the average selling price of cement and clinker, the gross profit margin of enterprise sales still declined. According to the interim report data, the cost per ton of cement and clinker produced by Tianrui Cement in the first half of the year was about 185.0 yuan/ton, a year-on-year decrease of 17.9%. Among them, the unit cost of raw materials, coal and electricity was 63.9 yuan, 93.2 yuan and 27.9 yuan respectively, which decreased by 11.5 yuan, 28.2 yuan and 0.5 yuan respectively compared with the same period last year. However, as the unit selling price of cement and clinker decreased by 20.5%, the actual gross profit per ton decreased to RMB72.2 per ton, representing a year-on-year decrease of 17.9%.
Affected by the decline in unit gross profit of cement clinker business, the comprehensive gross profit margin of Tianrui cement business dropped to 23.51% in the first half of the year, down 3.72 percentage points from the same period last year.
Table 1: Comprehensive selling price, cost and gross profit
per ton of cement and clinker of Tianrui Cement in the first half of 2023 Data source: Cement Big Data (https://data.ccement.com/)
Meanwhile, During the period, the cost of Tianrui Cement remained high, and the rate of three fees rose to 25.51%, an increase of 4.26 percentage points over the same period last year, which was significantly higher than average level of listed companies in the same industry. Overall, in the first half of 2023, the net profit of Tianrui Cement dropped to 151 million yuan, a decrease of 67.03% compared with the same period last year, under the influence of many factors, such as the decline of business income, the decline of gross interest rate and the high cost during the period.
Table 2: Main operating data
of Tianrui Cement in the first half of 2023 Source: Cement Big Data (https://data.ccement.com/)
Market outlook: The business structure is single. In the second half of
2023, the infrastructure investment in Henan and Liaoning provinces, where the main market of Tianrui Cement is located, has some room for development, but due to the drag of the real estate market, the actual demand for cement is still facing greater downward pressure. Under the background of market shrinkage, the price of cement clinker is difficult to rise significantly. The business structure of Tianrui Cement is relatively single, and the proportion of aggregate business is limited, which is obviously affected by the industry environment. It is difficult to achieve performance growth in the second half of the year. It is expected that the operating income and net profit of Tianrui Cement will continue to decline year on year. (This article does not constitute investment advice)
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