Recently, Shangfeng Cement answered some questions about investors, such as what practices and results the company has in cost control? Is there room for improvement? Does the company have a longer term investment plan for aggregate projects? What is the company's outlook for the fourth quarter and next year. The details are as follows:
1. What are the company's practices and results in cost control? Is there room for improvement?
Answer: Continuous cost reduction and efficiency enhancement has always been an important business strategy and management foundation of the Company. At present, the company's cost control level has achieved some results, but there is still a certain gap between the advanced enterprises in the standard industry; There are also differences among the internal bases. Taking the unit standard coal consumption of cement clinker as an example, the company's comprehensive average standard coal consumption is currently about 103 kg standard coal/ton, but the actual standard coal consumption of clinker in some advanced manufacturing bases of the company has been reduced to less than 90 kg standard coal/ton, and there is still a lot of room. Therefore, the company is continuously reducing the main production indicators and manufacturing costs such as coal consumption and power consumption by benchmarking with advanced enterprises in the industry and benchmarking horizontally with internal bases, finding gaps and setting goals. The company has also held a special meeting recently, focusing on excellence, strict cost control, and further benefit from management. At the same time, the company is studying and applying low-carbon development measures such as raw material substitution, fuel substitution and accelerating the distribution of new energy to meet the more complex comprehensive cost challenges under the future low-carbon policy.
2. Does the company have a longer-term investment plan for aggregate projects?
Answer: Under the current market environment, the company's cement and aggregate production capacity expansion expenditure has slowed down, and there is no new aggregate production capacity this year. At present, the aggregate business is mainly laid out in some bases in East China and Northwest China, and the southwest region has made abundant resource reserves. We will continue to steadily increase the production capacity of the aggregate business.
3. What is the company's outlook for the fourth quarter and next year?
Answer: In the first three quarters of this year, the market was generally weak and depressed. The company focused on improving its internal strength and consolidating its competitiveness, and achieved certain results on the whole. We still have confidence in the fourth quarter and next year, and have relatively optimistic expectations.
On the supply side, it is important to see how to remove production capacity and resolve the basic problem of rapid overcapacity. At present, the production capacity of new projects in the industry has basically stopped, and backward production capacity will gradually withdraw under the pressure of high cost, high energy consumption and low-carbon policies. This year, the implementation of peak-staggering production policies in various regions has been continuously strengthened. The cement industry is expected to be gradually incorporated into the carbon trading market in the next year or so, and it is believed that the future industry capacity will be better implemented, which is conducive to the change and control of the supply side. On the
demand side, focusing on infrastructure, real estate and rural construction, under the background of the continuous introduction of a series of policies, such as the issuance of trillions of special treasury bonds and the acceleration of the transformation of villages in cities, it is expected that infrastructure will continue to develop and the demand for housing construction will be marginally improved, so it may be the beginning of the recovery of the industry's prosperity. It is expected that under the background of low carbon and energy consumption control, the supply-demand relationship will ease, and it is believed that the price will also come out of the trough and enter the upward stage.
4. Will the structure of capital expenditure in the next few years give priority to the investment in the two wings? What is the schedule of each cement grinding supporting project? What is the role of Huaining and Tongling incremental resources in improving the company's aggregate production capacity along the Yangtze River?
Answer: Since the beginning of this year, the pace of capital expenditure of the company has slowed down. In the future, the board of directors of capital expenditure will make specific arrangements in the annual plan, and the product matching, resource allocation and industrial supporting projects related to the main business will be steadily promoted according to the planned pace deployed by the board of directors.
5. Is there any room and possibility for the production lines in Guangxi and Guizhou to improve significantly in the past two years?
Answer: In recent years, the production lines in Guangxi and Guizhou are temporarily at a low ebb due to the centralized launch of new production capacity and the cyclical impact of the industry. Although the capital investment in the early stage is relatively large, the new projects have advanced equipment and technology, excellent operational indicators, and are gradually accumulating advantages and competitiveness. Each region will have its own cyclical fluctuations. In the long run, there will also be an upward development stage of prosperity.
6. What is the current price of cement in major regions ? Will prices rise in the future? How much is the increase? What is the price of coal in the third quarter? What is the purchase price? How will the price change in the future?
Answer: At present, the cement prices in the three regions where the Company is located have recovered to a different extent, showing an overall upward trend, but it is difficult to predict the specific price changes in the future. If the supply side is effectively controlled, coupled with the continuous promotion of the policy in the face of demand improvement, there is still room for subsequent price increases. In terms of coal, there was a short-term rapid rise in the early stage. At present, the arrival price of East China Regional Base is temporarily stable at the level of 1000-1100 yuan/ton.
7. What is the progress and rhythm of the company's overseas capacity expansion?
Answer: Overseas business is not the focus of the Company's business. At present, the Company has invested in the Uzbekistan Cement Project in cooperation with Conch Cement , which will be put into operation in stages in the near future. The Kyrgyzstan Project is still in the early stage of construction.
8. How to look at the role of additional issuance of trillions of treasury bonds in infrastructure construction, thus stimulating the demand for cement?
Answer: The government's issuance of trillions of treasury bonds, on the one hand, indirectly solves the long-term capital demand for infrastructure investment, forms a strong guarantee for infrastructure investment, and has an important positive impact on stimulating the demand for building materials; On the other hand, the investment direction of trillions of national debt, mainly including post-disaster recovery and reconstruction, key flood control projects, natural disaster emergency response capacity enhancement projects, other key flood control projects and other eight aspects, are closely related to cement building materials, cement building materials industry is of course an important advantage, the confidence of stable growth and high-quality development has been given great support. There are also more optimistic expectations for the recovery of the whole demand in the later period, which will further promote the prosperity of the industry.
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