Comprehensive comments: In the first three quarters of 2023, Tianshan shares achieved an operating income of 80.387 billion yuan, a year-on-year decrease of 18.5%, and a net profit attributable to shareholders of the parent company of 51 million yuan, a year-on-year decrease of 98.75%. In the third quarter, the operating income was 26.944 billion yuan, a year-on-year decrease of 18.77%, and the net profit attributable to the shareholders of the parent company was -91 million yuan, a year-on-year decrease of 115.86%. In the third quarter, the cement market was weaker in the off-season, and the company suffered a loss in operation. Figure
1 and Figure 2: Profit of Tianshan Shares Drops
in the First Three Quarters of 2023 Data Source: Cement Big Data (https://data.ccement.com/)
Revenue and Profit Decline Q3 lost money
again. In the first quarter, the company encountered great difficulties in operation, with a net profit attributable to the parent company of -1.231 billion yuan, a large loss. In the second quarter, the company's performance improved greatly, with a net profit attributable to the parent company of 1.373 billion yuan, making up for the loss in the first quarter. In the third quarter, the market downturn continued. Under the two-way squeeze of falling cement prices and rising coal prices, the company once again fell into a loss state, with a net profit of-91 million yuan in the third quarter. In the first three quarters of 2023, Tianshan shares realized operating income of 80.387 billion yuan, down 18.5% year-on-year, and net profit attributable to shareholders of the parent company of 0.51 billion yuan, down 98.75% year-on-year.
Table 1: Main operating data
of Tianshan Cement in the first three quarters of 2023 Data source: Cement Big Data (https://data.ccement.com/)
The main profit indicators of the Company declined. In the first three quarters of 2023, the gross profit rate was 15.09%, down 1.55 percentage points from the same period last year, and the decline was relatively small. Net interest rate and return on equity fell by -0.21% and 0.06% respectively in the first three quarters, down 4.66 and 5.08 percentage points from the same period last year. The main reasons for the large decline in profits of Tianshan shares are as follows. Since the beginning of
this year, the cement industry has continued the declining trend of last year. Under the influence of insufficient demand and fierce market competition, the cement price has continued to fall. According to the big data of China Cement Network, the national cement index in the first three quarters averaged 125.72 points, down 20.88% from the same period last year. Although Tianshan Cement has not announced the average price of cement sales, the author speculates that the price of cement is not low, and the sharp decline in cement prices has become the main reason for the company's sharp decline in profits.
Figure 3: Deep Drop in Cement Price in the First Three Quarters of 2023 (Points)
Data Source: Cement Big Data (https://data.ccement.com/)
Investment Income Decline & nbsp; As a cement company with the largest scale, complete industrial chain and nationwide layout in China
, Tianshan shares have many joint ventures. Under the dual influence of declining demand and falling prices, cement enterprises have encountered unprecedented difficulties in operation, especially some small and medium-sized enterprises, most of which are in a state of loss. Many joint ventures of Tianshan Stock Company are under great pressure, resulting in a sharp decline in the company's investment income. In the first three quarters of this year, the company's investment income was only 128 million yuan, down 77.1% from the same period last year.
Figure 4: Decline
in Investment Income of Tianshan Cement in the First Three Quarters of 2023 Data Source: Cement Big Data (https://data.ccement.com/)
Increase in Administrative Expenses The high
rate of three fees has always been the pain point of Tianshan Stock Company's operation. In the first three quarters of 2023, the cement market continued to shrink, with the company selling 172 million tons of cement, down 1.81% from the same period last year. The company's sales and financial costs declined, but the management costs did not decrease but increased, resulting in an increase of 1.87 percentage points to 11.63% over the same period last year, reaching the highest level after restructuring. The high rate of three fees is one of the important obstacles to the improvement of the profitability of Tianshan shares.
Table 2: Three Fees of
Tianshan Cement in the First Three Quarters of 2021-2023 Data Source: Cement Big Data (https://data.ccement.com/)
Profit Outlook: Limited Improvement in the Fourth Quarter From
the external perspective, although the issuance of trillions of treasury bonds is good for the infrastructure industry, the demand for cement is limited, and the overall environment of the cement industry in the fourth quarter tends to be bad; Internally, under the influence of the environment, the sales of cement and clinker , the company's main products, are difficult to increase. Despite the rapid development of aggregate business (103 million tons of aggregate were sold in the first three quarters, up 20.79% year-on-year), its proportion is relatively low, which makes it difficult to effectively increase the company's revenue. It is expected that the company's profits in the fourth quarter will improve to a certain extent compared with the third quarter, but throughout the year, the profit situation is not optimistic. (This article does not constitute investment advice)
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