Comprehensive review: In the first half of 2023, CNBM achieved an operating income of RMB102.374 billion, representing a year-on-year decrease of 8.5%, and a net profit attributable to the parent company of RMB1.404 billion, representing a year-on-year decrease of 74. In the first half of the year, the performance of CNBM cement segment declined due to weak demand and intensified market competition. However, with the steady development of new materials and engineering technology service sectors, the pace of transformation and upgrading of China's building materials has continued to accelerate, and high-quality development has entered a new stage.
Figure 1 and 2: Revenue of CNBM in the first half of 2023, Decline in
profit Source: Cement Big Data (https://data.ccement.com/)
Decline in cement business Decline in
profitability In the first half of 2023, the cement market demand was weaker than same period. CNBM sold 142.18 million tons of cement clinker , representing a year-on-year decrease of 2.6%. Under the environment of fierce market competition, the price of products decreased significantly. In the first half of the year, the average price of cement clinker was 297.9 yuan/ton. Year-on-year decrease 15.
Figures 3 and 4: Decline
in both volume and price of CNBM cement products in the first half of 2023 Source: Cement Big Data (https://data.ccement. Among the major profit indicators, net profit attributable to parent company decreased by 74.9% year-on-year to RMB1.404 billion. The return on equity recorded 1.34%, representing a decrease as compared with the corresponding period of the previous year. 3. Although the selling price of the Company's cement products decreased significantly, the overall gross profit margin of the Company decreased slightly due to the decrease in costs and the increase in profits from non-cement segments.
Table 1: Main operating data
of CNBM in the first half of 2023 Source: Cement Big Data (https://data.ccement.) In the first half of this year, the total sales volume of cement clinker of Tianshan Cement was 121.65 million tons, representing a year-on-year decrease of 4.3%. The average sales price was 300.3 yuan/ton, down 13.5% from the same period last year. The decline in the volume and price of cement products led to a decline in the company's revenue. In the first half of the year, the operating income was 53.443 billion yuan, down 18.36% from the same period last year. Although the operating cost decreased to a certain extent, its proportion in the operating income increased to 85%. Due to the high cost, the decline of investment income and the loss of credit impairment, the net return to the mother fell sharply, with a net return of 142 million yuan in the first half of the year, down 95.94% from the same period last year. Net profit loss after deduction of non-attributable profits 4.
Figure 5. 6: In the first half of 2023, the profit of Tianshan shares decreased significantly.
Data 
source: Cement Big Data (https://data.ccement.com/) Qilian Mountain
: Infrastructure has a significant pull. Profit decline is still big
Qilian Mountain main business area in Gansu, Qinghai, Xizang area, in the three places have a higher market share. In the first half of this year, Qinghai, Xizang area infrastructure projects started more, cement demand pull up obviously, which to some extent hedges the Qilian Mountain in Gansu area due to the real estate downturn caused by the loss of cement sales. However, due to the weak recovery of overall demand and the increasing pressure of market competition, Figures 7 and 8: Decline in both revenue and profit of Qilian Mountain in the first half of 2023 Source: Cement Big Data (https://data.ccement. In the first half of the year, the demand for cement in Ningxia recovered moderately. Ningxia building materials cement clinker sales increased slightly, with a total sales of 568.34 tons of cement clinker, an increase of 2.61% over the same period last year, and the sales of cement clinker realized business income of 1.669 billion yuan. At the same time, Ningxia building materials increased the external promotion of digital logistics and transportation business, which realized business income of 22.2023. Ningxia building materials realized business income of 4 billion 263 million yuan, an increase of 22.24% over the same period last year; Due to the impact of the decline in product prices on the cement business and the meager profit of the transportation business, the profit of building materials in Ningxia has declined considerably, with a net return of 152 million yuan in the first half of the year. Figures 9 and 10: Increase in income of building materials but not increase in profit in Ningxia in 2023 Data source: Cement Big Data (https://data.ccement.) Up to now, the actual aggregate production capacity of the Company has exceeded 230 million tons, ranking first among China's cement enterprises. In the first half of the year, 69.303 million tons of aggregates were sold, an increase of 19.3% over the previous year, and sales revenue reached 2.696 billion yuan. Year-on-year growth 4. Figure 11: Steady growth of sales volume of building materials aggregates in China in the first half of 2023 Data source: Cement Big Data (https://data.ccement.2023) In the first half of 2023, the new materials and engineering technical services business maintained a good momentum of development. Among them, the new material sector realized business income of 23.308 billion yuan, an increase of 6.46% over the same period, and the proportion of revenue increased by 2.68 percentage points to 22.77% over the same period; Engineering and technical services business realized business income of 15.854 billion yuan, an increase of 12.45% over the previous year. Figure 12: Steady growth of non-cement business of building materials in China in the first half of 2023 Source: Cement Big Data (https://data.ccement. Basic building materials, Projects such as Qilian Mountain Trusteeship to Tianshan Stock and Ningxia Building Material Cement Business Control Transfer to Tianshan Stock have made phased progress. In terms of the new materials segment, CNBM Investment entered into an equity transfer agreement with China Jushi in February this year to acquire 100% equity interest in Beixin Technology; and in April, Beixin Coatings acquired 51% equity interest in Tianjin Lighthouse Coatings. In the engineering and technical services sector, the company successfully completed the integration of operation and maintenance business and accelerated the integration of equipment business.Outlook for the second half of 2023: The cement business will continue to be under pressure and the profit may be hovering at a low level. At present, CNBM continues to accelerate industrial transformation and upgrading and promote the restructuring of business segments, improve the quality of operation and increase the company's profits. In the short term, despite the steady development of the new materials and engineering technology services sector, the proportion of the company's cement business sector is still high, the demand recovery of the cement industry in the second half of the year is limited, and the overall profit level is expected to improve limitedly. In the medium and long term, with the continuous integration and optimization of the company's business sector and the accelerated pace of internationalization, the operation quality of China's building materials will continue to improve, and the profitability will continue to increase, looking forward to the long-term development of China's building materials.
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