2023, China's economy as a whole continued to recover to a positive trend, with GDP growing by 5.1% year-on-year and economic growth faster than in 2022. Among them, infrastructure investment grew by 5.9% year-on-year, 3.5 percentage points slower than in 2022; Investment in real estate decreased as compared with the same period last year 9. Affected by insufficient infrastructure support and the continuous downward trend of real estate, the demand of the cement industry continued to be weak throughout the year, and the national cement output in 2023 20. Under the influence of the decline in demand, the contradiction of excess capacity was further intensified, the market competition was extremely fierce, the cement price dropped significantly, and the industry profit shrank sharply again, with the annual profit falling by more than 50%. The development of cement industry has entered an unprecedented difficult period, and many companies have suffered heavy losses. Nevertheless, some leading companies actively seek transformation and upgrading, extend the industrial chain, accelerate the pace of going to sea, and have made remarkable achievements in the downturn of the industry. According to the statistics and analysis of
Cement Big Data Research Institute, there are 21 listed companies in the cement industry in Shanghai, Shenzhen and Hong Kong, including 14 in Shanghai and Shenzhen and 7 in Hong Kong.
First, the performance of listed companies: Most of the profits fell and some of the losses were relatively large
. From the perspective of revenue, only 6 of the 21 listed companies achieved revenue growth, while 15 experienced a decline. Companies with revenue exceeding 100 billion yuan are still China Building Materials, Conch Cement and Tianshan Stock. China Building Materials is still at the top of the list. Conch Cement's total revenue surpasses Tianshan Stock, ranking second, and Tianshan Stock drops to third. Revenue growth companies are Ningxia building materials, Qingsong Jianhua, Huaxin Cement, Conch Cement, Western Cement and Tibet Tianlu, of which Ningxia building materials and Qingsong Jianhua revenue growth rate are more than 20%, Ningxia building materials logistics business continued to develop, helping the company's revenue growth at a high speed, with a total revenue scale of more than 10 billion; The construction of many infrastructure projects in Xinjiang has led to the recovery of cement demand, and the sales volume of Qingsong Jianhua Cement has increased greatly; Huaxin Cement's overseas business has made great efforts, and its revenue has increased by 10.15% year on year. Yatai Group has a decline of more than 20%. Table 1: Earnings of Listed Cement Companies in 2023 Data Source: Cement Big Data (< https://data.c Among them, only 4 profitable companies achieved growth and 10 companies declined; among the loss-making companies, 3 companies continued to expand their losses, 3 companies turned to losses, and 1 company reduced its losses. Specifically, profitable companies such as Zhonghua New Cement, Tapai Group, Qingsong Jianhua and Sichuan Shuangma have achieved growth, while Zhonghua New Cement has benefited from a large increase in aggregate sales, sustained growth in overseas business and steady growth in profits; The regional demand of Tapai Group and Qingsong Jianhua is good, the sales volume of cement is increasing, and the profit is good, especially Tapai Group, which has a low base in the same period, and the profit has increased by 178.55% due to the increase of non-recurring gains and losses; Private equity investment business income increased, Sichuan Shuangma profit growth 19.10 companies, most of the decline is larger, China Building Materials, Asia Cement, Jianfeng Group, Western Cement, China Resources Building Materials Technology and Tianshan shares fell by more than 50%; The profit of Ningxia building materials, evergreen and conch cement decreased by 30% -50%, and the profit contraction was also obvious. The main reason for the decline in profit was the deep decline in cement price. Among the seven loss-making companies, Tianrui Cement, Shanshui Cement and Jidong Cement have turned to losses, while Dongwu Cement has not yet turned to losses, but the loss margin has been reduced; The losses of Fujian Cement, Yatai Group and Tianlu in Tibet continued to expand, especially Yatai Group in the northern region, which lost 3.947 billion yuan in 2023. Sales of cement clinker: Increase and decrease in sales volume and decrease in selling price of most companies According to the data of the top ten companies in terms of total sales volume of cement clinker, Shanshui Cement surpassed Huaxin Cement to rank sixth, while Huaxin Cement dropped to the seventh place, while the ranking order of other companies remained unchanged. According to the change of total sales volume of cement clinker, of the 19 companies that published sales data, 8 companies increased their sales volume and 11 companies declined. Among the companies with sales growth, the growth rates of Qingsong Jianhua and Tibet Tianlu were 35.51% and 27.81% respectively, which were mainly related to the start-up of infrastructure projects in Xinjiang and Tibet and the recovery of demand; Among the declining companies of Shanshui Cement and < a href = "https://price.ccement.com/brandnewslist-1-1000366.11", only Tianrui Cement has declined by more than 10%, reaching 13%, and the demand in Henan has declined considerably in 2023. The sales volume of Tianrui Cement has been greatly affected; Ningxia Building Materials, Sichuan Shuangma, Huarun Building Materials Technology, Asian Cement, Fujian Cement and Conch Cement declined by 5% -10%, among which the decline in sales of Conch Cement was mainly related to the decrease in trade volume. The sales volume of its self-operated products increased slightly as compared with the same period last year. Table 2: Sales volume and average price of cement clinker of major listed cement companies in 2023 Data source: Cement Big Data (< https://data.ccement. Tibet Tianlu, The average sales price of cement clinker in the west increased by 3.13% and 0% respectively compared with the same period last year. Among the companies, Shanshui Cement, Jidong Cement and Tianrui Cement all decreased by more than 20%, all of which were northern companies. Among them, Shanshui Cement and Jidong Cement exchanged price for quantity, and the price of cement clinker dropped significantly; The prices of other companies fell between 10% and 20%, while the prices of Shangfeng Cement, China Building Materials, Asia Cement, Tianshan Stock, Evergreen Cement and Fujian Cement fell between 15% and 20%, with a relatively large decline; The prices of Conch Cement, Sichuan Shuangma, Jianfeng Group, China Resources Building Materials Technology, Tapai Group, Ningxia Building Materials and other six companies decreased by 10% to 15%, with a moderate decrease; the prices of Qingsong Jianhua and Huaxin Cement decreased by about 8%, with a relatively small decrease. Analysis of data per ton: Decrease in both cost and gross profit According to the data per ton of the 14 major listed companies that published the data per ton, the selling price per ton declined as a whole due to sluggish demand and fierce competition, while the cost per ton declined synchronously due to the decline in coal prices. From the perspective of absolute value of production cost, the cost per ton of Tianlu in Tibet is as high as 438.66 yuan/ton, ranking first, which is mainly related to the difficulty in obtaining raw materials in Tibet; the cost control ability of Shangfeng Cement is relatively excellent, and the production cost per ton is 188. From the perspective of cost decline, Tapai Group has the largest decline, with the cost per ton falling by 21.67% compared with the same period last year; The cost per ton of Tianshan Stock, Shangfeng Cement, Jidong Cement, Evergreen Cement, Conch Cement, Fujian Cement, Jianfeng Group and Huaxin Cement decreased by 10% -18%, of which the cost reduction effect of Tianshan Stock was obvious, with 2 of the 17. 14 companies showing an increase in gross profit per ton and 12 declining. Among the two companies with an increase in gross profit per ton, the gross profit per ton of Tianlu Cement in Tibet increased by 231.7% year on year due to the increase in selling price and the decrease in cost; Tapai Group vigorously promoted the work of reducing cost and increasing efficiency, with a significant decrease in cost and an increase in gross profit per ton of 43. Among the companies with a decrease in gross profit per ton, the gross profit per ton of Fujian Cement continued to be negative, with a decrease of 411.2%; The gross profit of Qingsong Jianhua is the highest, reaching 137.87 yuan/ton; The utilization rate of alternative fuels for Huaxin Cement has increased year by year, effectively hedging the decline in cement prices. Gross profit per ton slightly decreased 3. Table 3: Data of some listed companies per ton in 2023 Source: Cement Big Data (< https://data.ccement.2023 In 2015, the cement industry realized operating revenue of RMB743.32 billion, representing a year-on-year decrease of 17%. The total profit was 32 billion yuan, down 51% year on year, and the sales profit margin was 4.31%. Figure 1: The total profit of the cement industry decreased significantly in 2023 Data source: Cement Big Data (https://data.ccement. The top four companies with higher profit margins are Sichuan Shuangma, Tapai Group, Shangfeng Cement and Huaxin Cement. Especially for Sichuan Shuangma, the sales profit margin is 92. Among the 10 companies whose sales profit margin is lower than the industry level, 3 are positive and 7 are negative, among which Yatai Group, Tibet Tianlu and Fujian Cement have large losses and low sales profit margin. Figure 2: List of Sales Profit Margins of Listed Cement Companies in 2023 < IMG SRC = "https://img7.ccement.".Com/richtext/IMG/iq718bw6 mda1716444737941.png "> Data Source: Cement Big Data (https://data.ccement.com/) V. Profitability: Most of the companies with low profitability showed a decline . From the perspective of return on net assets, 14 of the 21 listed companies had a positive return on net assets and 7 had a negative return on net assets. Among them, only one company in Sichuan Shuangma had a return on net assets of more than 10%, which was 14.1%; The return on net assets was positive, and there were 2 companies that increased. The return on net assets of Tapai Group increased by 4.07 percentage points, and that of Sichuan Shuangma increased by 0. Yatai Group suffered serious losses, and the return on net assets decreased by 21 percentage points. Jidong Cement, Fujian Cement, Shanshui Cement and Tianrui Cement suffered losses, and the return on net assets decreased by 6-10 percentage points. In terms of net interest rate, 4 companies have a net interest rate of more than 10%. Sichuan Shuangma won the first prize (80.58%), and Yatai Group (-53.78%) ranked the bottom; the largest increase in net profit margin was Sichuan Shuangma, which increased by 13.07 percentage points compared with the same period, and the largest decline was Yatai Group, which decreased by 19 percentage points compared with the same period in 2022. In terms of gross profit margin, 9 companies increased and 12 companies decreased. The gross profit rate of Sichuan Shuangma is far ahead, reaching 50.77%; Tapai Group and Sichuan Shuangma have increased considerably. Table 4: Main Profitability Indicators of Listed Cement Companies in 2023 Data Source: Cement Big Data (https://data.ccement.com/) VI. 2024 Profit Forecast: The profit is worrying and the company is under great pressure . Since 2024, both the back-end sales and the front-end new construction of real estate have continued the downward trend. At present, they are in a state of deep decline and are still in the process of bottoming out; In terms of infrastructure, as of May 22, the issuance progress accounted for 23% of the whole year. At the price level, the decline in demand led to further highlighting the contradiction of excess capacity, and cement prices were difficult to improve. To sum up, it is expected that the benefits of the cement industry will continue to decline in 2024, and the overall operation pressure of cement enterprises will be greater. Figure 3: The real estate is still in the bottom Data source: Cement Big Data (https://data.ccement.) Huaxin Cement is actively looking for high-quality assets worldwide, and the production lines of Western Cement in Uzbekistan and Ethiopia will be put into operation this year. At that time, overseas business will be further developed, which will effectively hedge the decline in domestic performance, so as to achieve overall profit growth in the context of the downturn in the domestic industry, which deserves attention.
