A few days ago, Conch Cement held a press conference in Hong Kong. The minutes of the press conference are as follows:
In terms of business strategy, we support peak staggering to maintain industry profitability, but the share is the bottom line
. After the second half of last year, the share of Conch Cement has gradually rebounded. Since last year, the share has basically remained around 13%. Firmly support off-peak production, share stability is the basic premise, if large enterprises off-peak, small enterprises do not stop the kiln is not feasible, especially last year there were many. In recent years, demand has been declining in stages, demand is insufficient, and 200 million tons of clinker have been added during the 13th Five-Year Plan period. The impact of new production capacity is relatively large, and the price pressure in places with more new production capacity will be greater. There are still seven lines to go out in the second half of the year. In the short term, the company's basic strategy is to maintain its share and make profits.
First of all, the company firmly supports off-peak production, improves industry profits, and at the same time promotes off-peak production, conch also has its own bottom line, the bottom line is the share of conch. Originally, the gross profit per ton of products was very high. At this time, it is acceptable to have a good benefit supplement by properly losing the share of points. But now, the pressure of price decline will be further magnified. The turnover rate will drop by 10 points, and the impact on cost will be more than 10 points, which will magnify the impact on cost.
At present, there is a periodic rebound in demand, and the improvement of demand in the specific peak season needs further observation
to see a periodic rebound in demand in the second half of the year. Compared with last year's situation, there may be a gradual rebound in the third and fourth quarters of this year. Predicting the current 60-70% loss of the industry, at the beginning of the year, the company was optimistic about this year's judgment, but in April, the demand callback was relatively large, and now it must be bottoming, as to how long the bottom depends on the demand situation. Referring to the demand in the second half of last year, the demand in September-November is still good, so now we are still looking at the demand. If the real estate can rise and the seasonal peak season is still possible to repair, the cement price in the second half of last year has rebounded by 30-50%. At present, the demand is still slightly better. From the perspective of
long-term demand, the national cement demand in 2005 was 1 billion tons, the "12th Five-Year Plan" became 2 billion tons, the production capacity doubled, the "13th Five-Year Plan" to the platform period of 2.4 billion tons, the end of the "14th Five-Year Plan" may be maintained to 2 billion tons, and the "15th Five-Year Plan" will return to about 1.5 billion tons. In the
medium and long term, carbon quotas and mergers and acquisitions
used to be less in the past, and it was easy to do peak staggering production, but now it will be more difficult when the region is large, and the regions will interact with each other, so now it is one region and one policy, and it is necessary to implement the policy at the same time. To return to the past peak level, demand must be better recovered, otherwise it is still very difficult to improve concentration through mergers and acquisitions.
Staggering the peak is not a matter for large enterprises, but for the industry. Large enterprises should lead the whole regional enterprises. If so, the share of the leading enterprises will not become lower. Conch needs share, and only with share can it be competitive. In 2021, when the price is very good, the market will be lost, and some large enterprises with weak competitiveness may have share problems.
The "13th Five-Year Plan" industry is very profitable, and now many enterprises think that the contradiction between supply and demand is short-term, hoping that large enterprises can achieve some good benefits, but the company sees that this demand may be more of a downward trend, some of which are clear, such as commercial mixing willing to sell at a discount.
Aggregate price accelerates the layout, resources + logistics is the cost advantage source
. Aggregate production capacity at the end of the year is 130 million tons, and the plan is to achieve 300 million tons in 2025. It is difficult to grasp the specific resources, but it will not be too bad in the end. Commercial mixing plans to achieve 60 million square meters by the end of 2025, and the increase in the scale of commercial mixing does not depend on commercial mixing to make money. Aggregate will also be surplus in the future, but the competition and level of aggregate are different. The price of aggregate itself is not high, mainly because of the high gross interest rate. The first is the cost of resources, and the second is the cost of logistics. Cement logistics is not sensitive to the difference of more than ten yuan and twenty yuan, but the increase of 5-10 yuan in aggregate logistics is very sensitive. The company will go along the Yangtze River and Xijiang River. The logistics cost is very low. And before the company, the cost of acquiring limestone mining rights was relatively low.
Commercial mixing can not be developed blindly, because it is important to control the terminal market. Conch has some large aggregate layout in East and South China, because there are no limestone resources in the lower reaches of the Yangtze River and the coastal areas of East China and Zhejiang, and the western provinces of China are not suitable for large aggregate. Based on such a judgment, the company's aggregate development strategy is formulated. With sand and gravel aggregates and cement, it is also necessary to do some commercial mixing. It is better to cooperate with factories and local governments close to the central city and do some mergers and acquisitions to ensure the sales of cement and sand. The company is very clear about the cost of commercial mixing in each place and has the support of the industrial chain. The cost of commercial mixing can be better controlled than that of peers.
Others:
1) Mergers and acquisitions: The valuation of future mergers and acquisitions will be diversified. In the future, there will be resources and market valuation at the blank point of the market. In the future, it is more likely to do subtraction. Mergers and acquisitions are to stop them;
2) Dividends: the current dividend ratio is continuously increasing, considering the dividend rate on the one hand, considering the dividend rate on the other hand, and considering the long-term sustainable return of investors in general;
3) The current performance contribution of non-cement is more than 15%, and the proportion is 30% at the end of the Tenth Five-Year Plan;
4) Equity incentive: From the perspective of equity incentive, the plan has been reported to the SASAC in the early stage, but the original business situation is still at a high level. From the judgment and communication of the SASAC, it is different from the current situation. At present, it is still necessary to make an incentive mechanism, depending on the appropriate time.
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