Recently, Tapai Group has answered the questions about the reasons for the decline of cement sales and net profit in 2022, the future outlet of small and medium-sized production capacity below 2500t/d, the planning of the company's industrial expansion direction, the planning of aggregates, and the demand for 2023 cement.
1. According to the Company's 2022 performance forecast, the cement sales volume and net profit of the Company in 2022 have declined considerably. What are the main reasons?
Answer: The overall performance of cement demand in 2022 is characterized by "low demand throughout the year, not strong in the peak season and weaker in the off-season". Low demand led to a decline in cement prices , while coal costs rose significantly year-on-year, under the dual pressure of falling volume and price and rising costs, the industry's efficiency declined sharply. According to the statistics of the National Bureau of Statistics, the national cement output in 2022 was 2.12 billion tons, down 10.8% from the previous year. In the first half of
2022, the cement sales volume of the Company decreased significantly, mainly due to the continuous rainfall in Guangdong in May and June, and the decline has gradually narrowed in the third quarter. According to the annual performance forecast of the Company, the cement sales volume of the Company decreased by about 8% year-on-year, which is expected to be comparable to the decline in the national cement industry. The net profit of the Company declined significantly in 2022, mainly due to the decline in the profitability of the main cement industry, combined with the impact of the provision for impairment of fixed assets based on the principle of prudence and the year-on-year decline in non-recurring gains and losses in 2022.
2. Under the background of new energy consumption standard, where does the company think the future outlet of small and medium-sized production capacity below 2500t/d?
Answer: At present, the small and medium-sized production capacity in Shandong and other provinces has been eliminated through administrative means, and Guangdong has not yet issued a clear exit policy for small and medium-sized production capacity. With the continuous improvement of environmental protection and energy consumption requirements, small and medium-sized production capacity does not have sufficient market competitiveness in terms of cost. It is expected that small and medium-sized production capacity will be gradually cleared.
3. Please introduce the company's plan for the future development of the company's industry?
Answer: Cement is an important basic raw material for national economic construction. It is widely used in civil construction, water conservancy, national defense and other projects. At present, there is no alternative material. That is to say, there is still a rigid demand for cement. In the future, the company will continue to strengthen and refine the main cement industry, accelerate the construction of cement kiln co-disposal solid waste projects, intelligent factories, green mines and first-class safety standard enterprises, continuously improve the level of intelligent manufacturing, reduce costs and increase efficiency, and realize the green transformation and high-quality development of traditional industries. At the same time, the company is also actively promoting and exploring the development of new industries, and striving to cultivate new economic growth points of the company.
4. What are the company's plans for aggregates?
Answer: The aggregate industry is a resource industry. Under the trend of more and more stringent environmental protection of limestone resources, the company relies on its own limestone resources, scale capital, transportation and other advantages to expand the aggregate business, which can improve the utilization rate of mines and form a synergistic effect of the industrial chain. Guangdong Huaxinda Building Material Technology Co., Ltd. , a joint venture 45% owned by the company, has an aggregate design capacity of 4 million tons per year, and the raw materials come from the waste rock of Wenhua Mine. Another aggregate production line is under construction, with a planned capacity of 2 million tons per year.
5. Has the company's plan for repurchasing shares in 2022 been completed?
Answer: As of January 31, 2023, the Company has repurchased a total of 25.8552 million shares, accounting for 2.17% of the total share capital of the Company, according to the repurchase plan approved at the 19th meeting of the fifth session of the Board of Directors held on March 14, 2022. The company's repurchase plan for 2022 will expire on March 13, 2023, and
the company will issue an announcement on the progress and results of the repurchase as required.
6. How does the company further reduce costs and improve product competitiveness?
Answer: In view of the sharp decline in cement demand and enterprise efficiency, the company has taken various effective measures to reduce costs and increase efficiency. The first is to optimize the organizational structure, streamline personnel and improve work efficiency; the second is to further improve and optimize the procurement work, further broaden the procurement channels, strengthen the research and judgment of the coal price trend and reasonably determine the procurement quantity, and further reduce the procurement cost; The third is to strengthen the production management, realize the rational collocation of various materials and the comprehensive utilization of resources, explore the economic operation mode of the production line, and realize the optimal production cost of products; Fifthly, we should do a good job in cost management and control, accelerate the digitalization of management, firmly promote the benchmarking and industry benchmarking among enterprises under the company, and continuously reduce product costs.
7. How does the company judge the cement market demand in 2023?
Answer: The downstream of cement is mainly divided into three parts: infrastructure, real estate and new rural construction, among which the real estate market is an important variable. With the adjustment of epidemic prevention and control measures in December 2022, the introduction of "16 Financial Articles" and "Three Arrows" policies to support the development of the real estate industry, the real estate market is expected to stabilize and recover in 2023. During the first session of the 14th National People's Congress of Guangdong Province in January 2023, the Guangdong Development and Reform Commission announced 1530 key projects in Guangdong in 2023, with a planned investment of about 1 trillion yuan in 2023. As an important part of steady growth, key projects are expected to boost cement demand to a certain extent. In 2023, Guangdong, Guangxi and Fujian will adhere to the principle of green, low-carbon and high-quality development of the cement industry, and continue to carry out strong peak-shifting production actions. Meanwhile, the coal price is expected to decline steadily, which will also have a positive impact on the cost, and the industry's profitability is expected to usher in a recovery.
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