2024, the total profit of the domestic concrete and cement products industry was about 10.5 billion yuan, a year-on-year decline of 44%, and the industry benefits declined significantly. In this context, the operating pressure of mixing stations around the country has increased, and the market has paid more attention to the operational risks of enterprises. Through comparative analysis, this paper finds that compared with 2022, the current operation health of concrete enterprises has indeed declined to a certain extent. In addition, as the number of enterprises does not decrease but increases, it is still difficult to clear the market. The number of
enterprises is still growing, and the overall health is declining
. By the end of September 2024, there were 25,594 concrete enterprises nationwide with the qualification of ready-mixed concrete professional contracting (regardless of grade), an increase of 15.2% compared with 2022. Among them, there are 258 enterprises in the state of bankruptcy reorganization, an increase of 46.6% compared with 2022; the number of enterprises subject to dishonesty execution reaches 1557, an increase of 38.9% compared with 2022; Enterprises that are not in the state of bankruptcy reorganization and are not discredited (hereinafter referred to as "healthy enterprises") have a total of 23779, an increase of 13.7% compared with 2022.
Figure 1: Changes in the number of domestic concrete enterprises in 2022 and 2024 (Unit:)
Data source: Cement Big Data (https://data.ccement.com/)
Due to the low investment threshold in the concrete industry, With the characteristics of small loss of shutdown, it is relatively easy for enterprises to enter, and it is difficult to withdraw production capacity. Therefore, during the period of 2022-2024, although the domestic demand for concrete and the efficiency of the industry have been declining, the number of concrete enterprises has not decreased but increased, and the number of unhealthy enterprises has increased significantly higher than overall level.
In terms of structure, in 2022, healthy enterprises accounted for 94.2% of the total number of enterprises, while unhealthy enterprises (including dishonesty and bankruptcy reorganization) accounted for 5.8%. As of September 2024, the proportion of healthy enterprises decreased by 1.3 percentage points to 92.9% compared with 2022; the proportion of dishonest enterprises increased from 5.0% to 6.1%; the proportion of bankruptcy reorganization enterprises increased from 0.8% to 1.0%. In 2024, the number of dishonest and bankrupt enterprises increased further, indicating that the pressure of enterprise operation is greater and the health of the industry has declined.
Figure 2: Proportion of healthy and unhealthy concrete enterprises in China in 2022 and 2024 (unit:%)
Data source: cement big data (https://data.ccement.com/)
. Guizhou Province, Guangxi Zhuang Autonomous Region, Chongqing Municipality, Qinghai Province and Ningxia Hui Autonomous Region are all provinces and cities with high local debt risk. Among them, the proportion of healthy enterprises in Guizhou Province has dropped to less than 80%, and the number of bankrupt and dishonest enterprises has exceeded 20%.
Figure 3: Health Degree Changes of Concrete Enterprises in Various Provinces and Cities in China (Unit:%)
Data Source: Cement Big Data (https://data.ccement.com/)
Shrinking Profits, The difficulty of repayment is the main reason
for the decline in the health of concrete enterprises. Since 2021, the national concrete production has fallen from a high level, with an average annual decline of more than 10%. At the same time, the leading enterprises continue to expand the scale of mixed business for the strategic needs of market layout optimization and industrial chain integration. By the end of June 2024, the sales of the top five commercial mixed enterprises in China accounted for 9.8%, which was about 2.9 percentage points higher than that in 2022.
Figure 4: Trend of National Commercial Blend Output and Sales Proportion of Leading Enterprises in the Past Five Years (Unit: 10,000 square meters,%)
Data Source: Cement Big Data (https://data.ccement.com/)
In the downward trend of total market demand, Under the background of the continuous expansion of leading enterprises, the competition in the domestic concrete industry has become increasingly fierce, the transaction price has been falling all the way, the profit margin has been eroded, and the number of loss-making enterprises has increased significantly. By the end of June 2024, the total profit of the national concrete and cement products industry had dropped to about 10.5 billion yuan, a year-on-year decline of 44%, which was less than one third of the same period in 2021.
Figure 5: Total Profit and Year-on-year Growth Rate of Concrete Industry in the First Half of 2021-2024 (Unit: 100 million yuan,%)
Data Source: Cement Big Data (https://data.ccement.com/)
Meanwhile, Influenced by the insufficient sales prosperity of the real estate industry and the pressure of localized debt, the funds of downstream construction enterprises continue to be tight, the difficulty of repayment of concrete enterprises is increasing, the scale of accounts receivable in the industry has exceeded trillion yuan, and the risk of impairment loss is more prominent. By the end of June 2024, the turnover days of accounts receivable of domestic concrete listed companies reached 491 days, an increase of about 18.8% over the same period last year.
Figure 6: Increasing repayment pressure in the concrete industry in the first half of 2021-2024 (Unit: day,%)
Data source: cement big data (https://data.ccement.com/)
In the past three years, The concrete industry has experienced a downward cycle of demand, and the mixing station is facing pressure from many aspects, such as order volume, book profit and repayment. Lack of orders, difficulty in making profits and the breakdown of capital flow have led to an increasing number of enterprises in an unhealthy state, and the overall health of the industry has declined.
In addition, considering that the enterprise data used in this paper mainly come from industrial and commercial information statistics, the actual industry operation ecology may be worse. According to the survey of Cement Big Data Research Institute, some enterprises classified as healthy at the data level also have no orders to do and are forced to stop production, and the enterprises shut down in stages are far more than those withdrawn from bankruptcy. Such enterprises are actually in an abnormal state of operation at this stage, but it is difficult to eliminate them through market-oriented means in the short term, and the situation of death but not rigidity is more common.
In the downward cycle of the industry, the overall health decline is inevitable. Large enterprises should focus on reshaping market rules and industry structure while increasing market share, so as to enhance the voice of the concrete industry in the upstream and downstream industrial chain. For small and medium-sized enterprises, we should pay attention to the quality of operation and be alert to the risk of capital repayment.
