, Shangfeng Cement released a record of investor relations activities. On April 25, 2024, the company received a survey from 37 institutions, including other institutions, fund companies, securities companies and sunshine private equity institutions. Introduction to the main contents of investor relations activities:
Q: What are the changes in the volume and price of the company in the northwest region in the next 23 years
? A: The production bases of the company in the northwest region are mainly in three places, namely, Inner Mongolia, Ningxia and Xinjiang. Among them, due to the relatively remote and closed market in Xinjiang region, the price is relatively stable. At the same time, the clinker line of our Xinjiang base is the national energy efficiency leader, and the product manufacturing cost is the lowest, so the profit contribution is relatively large. In addition, due to the relatively high price of special oil well cement in Ningxia base, the overall average sales price in Northwest China has been raised, so the overall business volume and performance contribution in Northwest China have increased in 23 years.
Q: How does the management judge the demand and price trend
from the second quarter to the third quarter? A: At present, the cement industry is greatly affected by external factors such as policies and the economy. If the production capacity is not expected to change significantly, the East China base, the core area of the company, should be relatively stable in general. For the trend from the second quarter to the third quarter, we are confident that we can maintain a relatively stable stage in the later period.
Q: What is the trend
of the volume, price and profitability of the aggregate business in 24 and 25 years? A: In 23 years, the production and sales of aggregates in East China declined slightly, while the production and sales in Northwest China increased. However, due to the abundant reserves of limestone resources for aggregates, the production capacity of aggregates will continue to rise in the future, and the specific increment will steadily increase production capacity and sales according to market changes. The company plans to reach about 30 million tons of aggregate production capacity in the future.
Ask: What is the reason for the increase in the dividend ratio this year? How will the dividend policy be considered
in the future? A: The company's dividend ratio is relatively stable. In recent years, it has always maintained a dividend rate of more than 30%. Since the reorganization and listing in 2013, the company has not raised funds from the capital market, and has accumulated dividends of about 3.124 billion yuan to investors; In 2023, the company plans to further increase the dividend rate, with a cash dividend of 382 million yuan, accounting for 51.38% of the net return to the parent company, and a dividend rate of about 5.5%. The sustainable development of the company can not be separated from the strong support of shareholders, so while maintaining its healthy and sustainable development, the company pays attention to the interests of shareholders and continues to create value returns for shareholders.
Ask: How will the total amount and structure of the company's future investment change? What
is the reason for the decrease in the investment quota of the new economy? A: In terms of future investment, we will always focus on the company's "one main and two wings" development strategy, focusing on the main business of cement building materials, deeply cultivating the extension wing of the industrial chain and the equity investment wing of the new economy, forming a stable triangular form. The principle is to "strictly control capital expenditure", according to the judgment of industry trends, combined with the company's current financial situation, adjust the pace of investment development, the focus of work will be closely around cost reduction, efficiency, cost control, enhance the level of fine operation, effectively enhance their resilience to risk and comprehensive competitiveness, and steadily respond to market cycles. To ensure the smooth operation of the company in the environment of intensified competition in the industry.
Q: I would like to ask how the company will improve its market value return to investors
in the next step. A: First of all, there are many forms of return to investors, and performance improvement is the most basic and core element of market value management. Under the strategic guidance of "one main and two wings", the company tries to improve its market value in the downward range of its main business. Through the performance growth of new economic equity investment, cement kiln collaborative environmental disposal and other businesses to balance and supplement part of the performance fluctuations of the main business, it is actually a substantive market value management from the strategy of structural adjustment and optimization of performance. Secondly, continuous dividends are also a major form of return to investors. There is a capital market pricing theory in finance. Dividends will play a very important role in helping the market value of enterprises. In addition, regulators now advocate that listed companies should pay dividends and gradually increase the proportion of dividends. Finally, the company's management will strive to operate, improve the company's profitability and corporate governance level, and strive to reward investors with good performance.
Ask: How about the operation of our shareholder's subsidiaries engaged in pipe business and real estate business? Has the listed company borrowed
funds from these companies? A: The listed company and Shangfeng Holding Group, which is controlled by the controlling shareholder, have always maintained a relatively independent state, and are not very clear about the specific operation of its business. There is no relevant capital exchange or lending between the listed company and the controlling shareholder Shangfeng Holding Group and its subsidiaries. For normal operational related party transactions, the company will strictly implement the resolution in accordance with the standard procedures of related party transactions, and disclose information to the outside world at the same time.
Q: The annual report shows that the pledge ratio of the controlling shareholder's equity of the listed company is still relatively high. Is there any risk
of subsequent change of the actual controller? A: Our actual controller is the most important core founder of the listed company. At present, the pledge ratio of the shareholders is within a normal and reasonable range, and there is no risk of subsequent change of the actual controller.
Q: Expansion and planning
of the Company's overseas business A: Overseas development is not an important area for the Company's strategic development at present, but it will be further laid out when conditions are met and risks are controlled. At present, the cement clinker production line project in Uzbekistan, which we have cooperated with Conch Cement (600585) overseas, has been put into operation smoothly. In addition, we have a project in Kyrgyzstan, and we are doing some preliminary work.
Q: Will the company consider mergers and reorganizations in which regions to increase market share
? A: If there are opportunities for further development and expansion, it will definitely be carried out around our current three regions (East China, Northwest China and Southwest China), which have certain synergy and relevance with the existing bases in these three regions.
Q: What is the prediction
of this year's start-up? A: The start-up rate mainly depends on some changes in downstream demand. From the current point of view, there may be a certain decline in the total demand. Of course, each region is different. The demand in the northwest region may be relatively stable, and the surplus in the southwest region may be more serious, so the operating rate will be relatively low.
Q: What are the company's practices and achievements in cost control? Is there any room for
improvement? A: Shangfeng Cement has always been one of our important business strategies, which is to achieve the ultimate cost. At present, the company's cost control level maintains a strong competitiveness in the industry. In 2023, when the price of raw materials is relatively high, the manufacturing cost of the company's main products has dropped by 15-16%, and the gross profit rate is currently the first among the listed companies in the industry. The energy consumption control of specific products maintained the leading level in the industry. In 2023, the average clinker standard coal consumption of the core indicators of the main products continued to decline to 102.57 kg/ton, and the electricity consumption also continued to decline. In the future, there may be a cost of carbon indicators. With the adjustment of industrial policies, it is expected that the control of energy consumption and carbon emissions will be a core means of overcapacity of the entire production line. The reason why we are now grasping the layout of some new energy businesses such as photovoltaic energy storage and striving for more carbon assets is also to prepare for reducing the cost of enterprises and improving their comprehensive competitiveness in the future. Of course, there is still room for further reduction in the current process energy consumption indicators, and the application of new technologies such as raw material substitution and fuel substitution is further promoting the company's cost reduction, which still has a large room
for optimization.