Recently, Jiangxi Wannianqing Cement Co., Ltd. released the semi-annual report of 2024, which showed that the company achieved operating income of 2.588 billion yuan in the first half of the year, down 36.97% year-on-year; net profit of 1.5092 million yuan, down 99.43% year-on-year.
The company's main sales area is Jiangxi market, radiating Fujian, Zhejiang, Guangdong, Hubei and other surrounding provinces. The company's product sales are a combination of direct sales and distribution (or consignment). Cement products are mainly distributed, supplemented by direct sales, and commercial concrete products are mainly direct sales, supplemented by consignment. For large-scale key projects, such as highways, railways and other national large-scale projects, the company adopts the direct sales model; for the civil market, small and medium-sized projects, due to the small quantity, the company adopts the distributor sales model to improve the supply guarantee and after-sales service.
The company's production and operation performance is mainly driven by the price of raw materials required for production and manufacturing, national macroeconomic policies, off-peak production, fixed investment in business coverage areas and other factors, with obvious cyclical, seasonal and regional characteristics.
From the perspective of raw material prices, all the limestone used by the company is mined by the company's own mines, and the mining cost is relatively low, which has little impact on business performance, but the cement manufacturing process is greatly affected by coal and electricity prices. In the first half of 2024, the overall price of power coal fluctuated downward, and the average price was lower than that of the same period. The company's production cost pressure has eased, and the operating cost has decreased year on year.
From the perspective of demand, cement demand is positively correlated with fixed asset investment and real estate development, among which infrastructure and real estate investment are important factors affecting cement demand. From January to June of 2024, the growth rate of national fixed assets investment was 3.9%, and the growth rate of infrastructure investment was 5.4%, of which the road transport industry, which is closely related to cement demand, decreased by 1%, and the public facilities management industry decreased by 4.5%, both showing negative growth. In terms of real estate investment, from January to June of 2024, the housing construction area of real estate development enterprises was 6968.18 million square meters, down 12.0% from the same period last year; among them, the residential construction area was 487437 million square meters, down 12.5%; The new housing construction area was 380.23 million square meters, down 23.7%, and the continuing downturn in the real estate industry seriously restricted the demand for cement. (Source: National Bureau of Statistics)
From a supply perspective. In 2024, the cement industry still showed a trend of "serious overcapacity". Although the expectation of environmental protection and low carbon still maintains the trend of "continuous overweight", "normalization of staggered peak production" and "carbon peak" have some constraints on the compression of cement supply in most regions, due to the overall weakening of market demand, the original production intensity of compressed cement has been difficult to reverse the current contradiction between supply and demand in a large scale, and the market. The effect of regulation and control on the supply side of superimposed peak staggering production is weakened, and the market competition is further intensified.
