Comprehensive review: In the first half of 2023, Huaxin Cement achieved an operating income of 15.832 billion yuan, a year-on-year increase of 10.02%, a net profit attributable to the parent company of 1.193 billion yuan, a year-on-year decrease of 24.83%, and a gross profit rate of 24.38%. Down 3.64 percentage points from the same period last year. Under the pressure of the main cement industry, non-cement business has become a new contributor to the company's performance, and the rapid development of overseas business has led to an increase in the company's revenue. However, the price and sales volume of domestic cement clinker declined in the first half of the year, resulting in a reduction in profits in the first half of the year.
Figures 1 and 2: Huaxin Cement's operating income increased and net profit attributable to parent company decreased
in the first half of 2023 Data source: Cement Big Data (https://data.ccement.com/)
I. Cost increased significantly. In the first quarter of
2023, the company realized operating income of 6.628 billion yuan, an increase of 1.49% over the same period last year. After the second quarter, the growth rate further expanded, and the final revenue in the first half of the year reached 15.832 billion yuan, an overall increase of 10.02% over the same period last year. Due to the decrease in sales volume and price of domestic cement clinker, the increase in operating costs exceeded the increase in revenue, resulting in a lower profit in the first half of the year. The net profit attributable to the parent company decreased by 24.83% to 1.193 billion yuan, and the gross profit margin decreased by 3.64 percentage points.
Table 1: Main operating data
of Huaxin Cement in the first half of 2023 Source: Cement Big Data (https://data.ccement.com/)
In the first half of 2023, the sales volume of cement clinker of Huaxin Cement was 29.9514 million tons. The year-on-year increase was 2.13%, while the sales volume of domestic cement and commercial clinker decreased by 0.76%, which fully indicated that the increase in sales volume was mainly driven by overseas cement demand. The selling price of cement clinker was RMB326/ton, representing a year-on-year decrease of 7.02%, and the final operating income of cement clinker business was RMB9.764 billion, representing a year-on-year decrease of 5.04%.
Figures 3 and 4: Sales volume and average price
of Huaxin Cement in the first half of 2023 Source: Cement Big Data (https://data.ccement.com/)
In the first half of 2023, The operating income of China, Asia outside China, Africa and the Middle East was 13.454 billion yuan, 1.375 billion yuan, 709 million yuan and 294 million yuan respectively. Except for the newly added Middle East region this year, the other regions increased by 6.98%, 20.73% and 5.17% year on year, which promoted the operating income of Huaxin Cement to increase by 10.02%.
Figure 5: Revenue
of Huaxin Cement in the first half of 2023 Source: Cement Big Data (https://data.ccement.com/)
In the first half of 2023, The sales price of cement clinker products of Huaxin Cement Company decreased by 7.02% to RMB326.00/ton as compared with the same period of last year, and the cost decreased by 4% to RMB251.62/ton as compared with the same period of last year. Affected by the significant decrease in domestic cement and clinker prices, the gross profit per ton decreased by 15.37% to RMB74.37/ton as compared with the same period of last year.
Table 2: Main ton data
of Huaxin cement clinker in the first half of 2023 Data source: Cement Big Data (https://data.ccement.com/)
II. In the first half of 2023
, the integrated development of the company showed that the aggregate sales in the first half of the year were 50.5124 million tons, an increase of 103.3% over the same period last year; the concrete sales were 10.9497 million cubic meters, an increase of 82.31% over the same period last year. At the same time, the company continued to promote the development of environmental protection business, control consumption and reduce costs, and received 1.94 million tons of various wastes in the first half of the year, an increase of 11% over the same period last year. During the reporting period, the proportion of concrete and aggregate revenue further increased, reaching 20.05% and 13.66% respectively, and the non-cement business steadily increased, which has become an important contribution to the company's profits.
Figure 6: Revenue of Huaxin Cement Concrete and Aggregate (RMB 100 million)
Source: Cement Big Data (https://data.ccement.com/)
III.
Under the situation of sluggish demand and overcapacity, the competition in the industry has intensified, the overall price of cement has weakened, and the performance of the industry has continued to decline. However, the business of Huaxin Cement covers 16 provinces/municipalities/autonomous regions in China and 14 countries overseas, with more than 300 subsidiaries and strong strength. In addition, the company has established a cement production network in southwest China, central China, East China and South China, as well as the countries along the "one belt and one road" and Africa, especially in Tajikistan, Kyrgyzstan, Uzbekistan, Cambodia, Nepal, Tanzania, Zambia, Malawi and Oman. The company's overseas cement grinding capacity has reached 16.77 million tons per year. It is expected that Huaxin Cement will continue to expand its overseas business, and the "cement plus" business will continue to work hard to jointly improve the company's performance. (This article does not constitute investment advice)
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