Conch Cement answered questions of concern to investors on the investor relations platform on January 4.
Investors: At present, the new contracts signed by central enterprises in the first three quarters of several major infrastructure projects have increased by more than 10% year-on-year, and the cumulative growth of new contracts is expected to exceed 10% throughout the year. These new contracts will probably start construction in three years, and the market size should not be less than 12 trillion yuan, even if cement only accounts for 2% of the project cost. In that year, there will be 600 billion cement demand. With 20% market share, Conch will also have 150 billion revenue. I think this market is still very big. Conch should expand against the trend, make full use of its capital reserves and regional advantages, and acquire cement production capacity and limestone mines for the next demand.
Conch Cement: At present, there is still some room for urbanization in China. With the support of the supporting financial policies of "guaranteeing the delivery of buildings" and "stabilizing the economy", the demand for cement will be supported in the short term. In 2022, the company made every effort to expand the market, stabilize customer channels, dispatch resources globally, and steadily increase its market share. The company will continue to focus on the market and maintain a reasonable level of volume, price and profit on the basis of stable share. In terms of investment and development, during the "14th Five-Year Plan" period, the company will focus on the main cement industry, steadily promote domestic project mergers and acquisitions and overseas project construction, build green low-carbon intelligent chemical plants, accelerate the development of upstream and downstream industrial chains such as aggregates and commercial mixing, actively develop new energy industries such as photovoltaic power generation and energy storage, and strive to return shareholders with better operating results.
Investors: In the later stage of urbanization in the future, the infrastructure is becoming more and more perfect. After the peak period of cement demand, combined with the analysis of domestic and foreign demand, what level can annual demand for cement be maintained in the future? Is there any significant impact on the company?
Conch Cement: Considering the promotion of the construction of transportation, municipal and industrial park infrastructure under the background of stabilizing the economy and people's livelihood, and the recovery of real estate business due to the easing of financial pressure of real estate enterprises after the opening of real estate financing channels, it is expected that the demand for cement will be relatively stable in the short term. In the long run, with the peak of urbanization rate and the gradual improvement of infrastructure in China, the per capita cement consumption will decline. The company will make every effort to protect market share, grasp the rhythm of sales, dispatch resources globally, and maximize the company's benefits.
Investors: Hello, is there any decline in the price of coal purchased by the company in the fourth quarter of this year compared with that in the third quarter?
Conch Cement: Influenced by macro factors at home and abroad, the coal price has soared and remained at a high level since the second half of 2021. In 2022, the domestic coal market is still in a state of tight supply balance, and the market coal price rose slightly in the fourth quarter. In the face of high coal prices, the Company has deepened the direct supply cooperation between coal enterprises, increased the proportion of direct supply between coal enterprises, promoted the optimization of coal variety structure, reasonably controlled the procurement rhythm, and strived to do a good job in coal cost control.
Investors: I would like to ask the current real estate security to allow refinancing of the new deal, whether it will have a substantial positive impact on the company's earnings?
Conch Cement: With the deployment of city-specific policies to support rigid and improved housing demand at the meeting of the Standing Committee of the National People's Congress, and the gradual implementation of relevant policies supporting guaranteed delivery, real estate credit financing, debt financing and equity financing will ease the financial pressure of real estate enterprises, which is expected to drive the recovery of some cement demand. So as to bring a positive impact on the company.
Investors: Will the company issue corporate bonds
linked to low-carbon transformation? Conch Cement: In recent years, the company has closely focused on the development idea of "innovation-led, digital empowerment, green transformation" to accelerate the development of green low-carbon transformation. In order to meet the capital needs of green low-carbon transformation and development projects and reduce the cost of capital, the company has successfully registered 10 billion yuan of medium-term bills with the China Association of Interbank Market Traders on October 14, 2022. Within the prescribed registration period, the company will issue green medium-term notes in stages according to needs and market conditions. The first issue will be issued at an appropriate time to raise funds for green bond support projects such as comprehensive energy efficiency improvement of cement kilns and photovoltaic power generation.
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