29 April, Asia Cement (China) announced an unaudited consolidated loss attributable to owners of approximately RMB130 million for the three months ended 31 March 2024.
The announcement said that in the first quarter of 2024, due to the downturn of the real estate market, the shortage of project funds and frequent extreme weather, the demand for cement was less than the same period last year, and the sales of cement products (cement + clinker ) decreased by 14% compared with last year.
Looking forward to the second quarter, the company expects that the demand for cement will remain under pressure and the relationship between supply and demand of cement will still face challenges, but the demand for cement is expected to improve marginally in the second half of the year. At the same time, after several rounds of "price war" since 2023, the competition in the industry is expected to return to rationality to a certain extent. The Group is cautiously optimistic about the development of the cement industry:
on the demand side, it is expected that the demand for infrastructure will rise steadily in 2024 driven by treasury bonds, but the drag effect of the downturn in real estate on the demand for cement will continue, and the demand for cement market is expected to decline slightly year-on-year throughout the year. The Central Economic Work Conference emphasized that the proactive fiscal policy should be moderately strengthened, and that infrastructure investment is still an important driving force for steady growth. In terms of improving the efficiency of government investment this year, the total amount of funds has exceeded 6 trillion yuan, including 1 trillion yuan of additional treasury bonds, 1 trillion yuan of ultra-long-term special treasury bonds, 700 billion yuan of central budget funds and 3.9 trillion yuan of local government special bonds. With the gradual implementation of the corresponding new infrastructure projects, the scale of infrastructure investment will maintain a net growth, and the serious shortage of market funds in the later period is expected to be alleviated. On
the supply side, in 2023, the benefit of off-peak production in various regions was weak, and after the "price war" in the cement industry throughout the year, the profits of enterprises generally declined or even suffered losses. In the first quarter, the cement market price has basically reached the bottom. With the successive disclosure of the first quarterly report, the major cement enterprises are facing increasing pressure on their performance. The enterprises have a strong desire to reduce losses and improve profits. The implementation of the peak staggering policy is expected to improve. Although the overall supply is still excessive, the cement price will show a trend of shock adjustment in the short term. But in the long run, cement prices will gradually return to the rational range.
In general, the demand for cement will continue to decline slightly in 2024, in which the demand for real estate will continue to bottom out and is expected to stabilize in the second half of the year, while the demand for infrastructure will accelerate with the gradual availability of funds. It is expected that the demand for cement in the second half of the year will be better than that in the first half of the year, and the market is expected to show a trend of low before and high after the whole year.
Under such circumstances, the Group said that it would continue to adhere to the business strategy of high efficiency, high quality, high service and high environmental protection, and strengthen customer service. On the other hand, the Group would give full play to its comprehensive storage and transportation advantages, actively undertake key projects in the surrounding areas, fully participate in market competition and maintain its core market share. Under a series of measures, the Group's performance in the second half of the year should be improved.
