[Special Topic] Review of Annual Reports of Listed Companies in Cement Industry in 2022

At present, there are 24 listed companies in the cement industry in Shanghai, Shenzhen and Hong Kong, including 17 in Shanghai and Shenzhen and 7 in Hong Kong. Performance of

listed companies: Most of the profits declined, and some of them suffered losses

. In 2022, the overall revenue and profits of 24 listed companies declined, and some of them even suffered losses. There are 20 enterprises whose business income has declined, among which China Building Materials, Tianshan Stock and Conch Cement, whose revenue exceeds 100 billion yuan, have declined between 15% and 23%, while Yatai Group, Jinyuan Stock, Xizang Tianlu and Dongwu Cement have declined by more than 30%, and there are 6 companies whose revenue has declined between 20% and 30%. Among them, Fujian Cement exceeded 28%, with a decline of 10% -20% in five enterprises, including China Building Materials, Shanshui Cement , Tianrui Cement , Asian Cement and Shangfeng Cement . There are five enterprises with a decline of less than 10%, of which the revenue of Jidong Cement and Huaxin Cement has decreased by 4.94% and 6. There are four companies whose business income has increased against the trend, namely, Ningxia Building Materials, Western Cement, Qilian Mountain and Ningbo Fidelity, mostly enterprises in Northwest China, although the demand for cement in Northwest China has declined. However, the price fluctuation was relatively small, and the business income recorded a positive growth. The increase in fuel oil sales in Ningbo Fidelity led to an increase in overall revenue, but the cement business still showed a significant decline.

From the perspective of net return to the mother, the profits of 23 companies declined and 5 companies suffered losses. Yatai Group, Xizang Tianlu, Fujian Cement, Jinyuan Stock and Dongwu Cement lost 3.454 billion yuan, 519 million yuan, 243 million yuan, 211 million yuan and 0.36 billion yuan respectively. Of the 175.19 profitable enterprises, 13 have cut their profits by half, most of which are leading, but the profitability of Conch Cement is still strong, and the absolute profit level is still the king. Qingsong Jianhua is the only company whose profits have increased.

Table 1: Profitability

of major listed cement companies in 2022 Source: Cement Big Data (

At the price level, the overall price decreased in 2022 due to the shrinking demand and fierce price competition in some regions. Prices of 11 of the 16 companies have fallen, with 7 of them falling by more than 10%. The main business areas of these 7 companies are mostly in the areas with strong demand in East and South China. In 2022, the demand in these two areas has declined significantly, and the price has fallen considerably, with Tapai Group falling by nearly 19%. The average sales price of five enterprises has risen, namely, Ningxia Building Materials, Qilian Mountain, Jidong Cement, Sichuan Shuangma and Shanshui Cement, among which the prices of Ningxia Building Materials and Qilian Mountain have risen by more than 10% year on year. Jidong Cement Average sales price of cement clinker increased year on year 6.

Table 2: Sales and average price of

cement clinker of major listed cement companies in 2022 Data source: Cement Big Data (https://data.ccement.com/)

Ton Data cent

According to the data per ton of 11 major listed companies that published the data per ton, the price per ton fell as a whole due to the sluggish demand, and the cost per ton rose as a whole due to the rising coal price. Among them, the production cost of cement clinker per ton in Fujian was the highest, which was 285.4 yuan/ton, and the building materials in Ningxia were significantly affected by the rising coal price. The cost per ton increased by 25.34% compared with the same period last year, and the cost control ability of Shangfeng Cement was relatively excellent. In 2022, the production cost per ton of cement clinker was 219.

The gross profit per ton depended on the offset extent of the changes in the selling price per ton and the cost per ton, and the gross profit per ton of most enterprises declined. The gross profit per ton of Qilianshan Cement increased. Despite the increase in cost, the increase in selling price led to the increase in gross profit; the gross profit per ton of Fujian Cement was negative due to the two-way squeeze of the decrease in selling price per ton and the increase in cost per ton.

Table 3: Tons of Data

of Major Listed Companies in 2022 Data Source: Cement Big Data ()

Industry Benefits: Decline in both volume and price combined with high costs

In 2022, the cement industry is expected to achieve operating income of about 940 billion yuan, a year-on-year decline of more than 12%, a total profit of about 69 billion yuan, a year-on-year decline of about 60%, and a sales profit margin of 7.26%. Year-on-year decrease 8.

Figure 1: Significant

decrease in total profit of the cement industry in 2022 Source: Cement Big Data (https://data.ccement. The top four cement companies with higher profit margins are Sichuan Shuangma, Western Cement, Shangfeng Cement and Conch Cement. Especially for Sichuan Shuangma, although the sales profit margin decreased by 17 percentage points to 76. Most of the 13 companies whose sales profit margin was lower than industry level decreased significantly compared with the same period, among which Yatai Group and Xizang Tianlu had larger losses and lower sales profit margins.

Figure 2: Ranking List of

Sales Profit Margin of Listed Cement Companies in 2022

Source: Cement Big Data (https://data.ccement.com/)

Profitability: Low level of profitability and most of them show a decline

In 2022, 19 of the 24 listed companies will have a positive return on equity. Five of them are negative, of which only four have a return on equity of more than 10%, of which Sichuan Shuangma is the highest, with a slight increase in the return on equity of Qingsong Jianhua. 1. The return on equity of Fujian Cement and Yatai Group decreased by 36.17% and 21.43% respectively, with a larger decline, although the absolute value of the return on equity of Shangfeng Cement remained at the forefront of the industry. However, compared with the same period, the net interest rate decreased by 17.

In terms of net interest rate, the net interest rate of 6 enterprises exceeded 10%. Sichuan Shuangma won the first prize (67.51%), and Yatai Group (-34.

In terms of gross profit margin, 24 cement listed companies declined in 2022, mainly due to the decline in sales prices and the rise in coal prices. The absolute gross profit rate of Sichuan Shuangma Cement and Shangfeng Cement is 41.99% and 33% respectively.

Table 4: Main profit indicators

of listed cement companies in 2022 Data source: Cement Big Data (https://data.ccement.) According to the first quarterly reports of listed companies, the decline in profits is generally large, and many companies even have large losses. Among them, there are many national and regional leading enterprises, and the pressure of small and medium-sized enterprises can be imagined. After the second quarter, the demand in the peak season has been falsified, and the price has fallen so far. It is expected that the benefit in the second quarter will remain low. In the second half of the year, the demand of the cement industry is expected to improve, but the problem of new investment capacity should not be underestimated, the pressure of price rise is heavy, and the expected benefit improvement is limited. Overall, the profit in the first half of the year is low, the improvement space in the second half of the year is limited, and it is expected that the industry's annual profit will be difficult to say optimistic, or will continue to decline. In this context, cement enterprises will face greater operational pressure.