2023, affected by the macroeconomic downturn and insufficient market demand, the cement industry continued its downturn since 2022. In the first quarter, the downstream resumption of work was better, and the overall demand was better than same period. After entering the second quarter, the peak season was not strong, and the demand weakened significantly. In addition, the market competition was fierce, and the cement price continued to fall. In the first half of the year, the national cement output was 953 million tons, down 2.4% from the same period last year, and the output hit a new low since 2012. In terms of benefits, due to the deep decline in cement prices and the decline in demand, the benefits of the industry shrank sharply, with a total profit of 16.47 billion yuan in 2023, down 59.8% from the same period last year. In terms of terminal downstream infrastructure projects and real estate in the
cement industry, fixed assets investment (excluding farmers) in the first half of 2023 amounted to 24.3 trillion yuan, an increase of 3.8% over the same period last year, of which real estate investment amounted to 5.86 trillion yuan, a decrease of 7.9% over the same period last year. In the first half of the year, real estate investment continued to decline, which caused a greater drag on cement demand.
At present, there are 22 cement listed companies in Hong Kong and Shanghai and Shenzhen, including 7 in Hong Kong and 15 in Shanghai and Shenzhen.
First, the performance of listed companies: Most of the revenue declined, and the profit declined significantly. In the first half of
2023, the overall performance of 22 listed companies was not good, and most of the profits declined, among which the profit declined significantly. Conch Cement, Huaxin Cement , Tapai Group, Western Cement, Ningxia Building Materials and Qingsong Jianhua have achieved positive growth in business income, among which Ningxia Building Materials has a large increase in revenue, exceeding 20% year-on-year, showing a bright performance; Conch Cement has a 16.28% increase in revenue year-on-year, with excellent results; The revenue of Huaxin Cement and Tapai Group increased by about 10%, while the revenue of Western Cement and Qingsong Jianhua was relatively stable, with an increase of less than 6%. The operating income of the remaining 16 companies declined by more than 30%, including Yatai Group and Dongwu Cement, Huarun Cement, Tianrui Cement and Evergreen Cement. China Building Materials, Shanshui Cement and Shangfeng Cement have a relatively small decline in revenue, all around 10%.
In terms of net return to the mother, only two of the profitable companies, Tapai Group and Qingsong Jianhua, have achieved profit growth, while 19 companies have experienced profit decline or loss, including Yatai Group, Jidong Cement, Shanshui Cement, Xizang Tianlu, Fujian Cement and Dongwu Cement. From the perspective of enterprises with increased net profit, the profit growth rate of Tapai Group is as high as 178%, mainly benefiting from the recovery growth of regional demand, the stable operation of Qingsong Jianhua and a small increase in profits. Among the enterprises with declining profits, most of them have a larger decline, although the net profit of leading conch cement is 6.468 billion yuan, which is still the most profitable cement company, but the profit is 34.3% lower than same period last year. China Building Materials, Tianshan Cement , China Resources Cement and Tianrui Cement and other leading companies all had a net profit decline of more than 60%, while Huaxin Cement, Shangfeng Cement and Western Cement performed relatively well, with a profit decline of less than 25%.
Table 1: Profitability
of 22 Listed Cement Companies in the First Half of 2023 Data Source: Cement Big Data (https://data.ccement.com/)
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