Comprehensive review: In 2024, the operating income of Western Construction [002302] will be 20.347 billion yuan, a year-on-year decrease of 11.01%, and the net profit attributable to shareholders of listed companies will be -263 million yuan, a year-on-year decrease of 140. Overall, the strategic layout of the domestic market of Western Construction will be gradually optimized and improved in 2024. Breakthroughs have been made in overseas business expansion, and the sales volume of commercial mixing has increased steadily throughout the year. However, due to the intensified competition in the industry, the price of commercial mixing has dropped significantly more than cost side, and the overall business has fallen into a loss state. In addition, the repayment cycle of western construction has been further extended, and the loss of credit impairment has increased substantially.
Figures 1 and 2: The revenue of western construction continued to decline in 2024, and the net profit attributable to the parent company turned from positive to negative (unit: 100 million yuan,%)
Data source: Cement Big Data (https://data.ccement.com/)
The strategic layout was optimized and adjusted.
In 2024, a total of 58.8481 million cubic meters of commercial concrete were sold in western construction, an increase of 0.62% over the same period last year, and the growth rate was 3% lower than that in 2023. In 2024, the contracted volume of concrete supply projects in western construction was 149 million cubic meters, an increase of 7. The number of major projects with individual contract volume of 100,000 square meters or more reached 237, totaling 3,939.
During the year, the construction of the western region continued to improve the market layout in major national strategic regions such as Beijing-Tianjin-Hebei, Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area, and 40 new mixing stations were added in the above regions, accounting for 74% of the total number of new stations. With the continuous release of the benefits of strategic layout optimization, even in the context of the overall shrinking demand in the industry, the number of construction orders signed in the western region and the sales volume of commercial mixing can still achieve growth. From the point of view of the signing of major projects, the increase of orders in Beijing, Anhui and Shanghai is the most obvious, with an increase of 1.2769 million square meters, 1.2421 million square meters and 81. In addition, four major projects were signed in Indonesia, Malaysia and Cambodia in 2024.
Figure 3: Contract volume and sales volume of commercial concrete of Western Construction in recent five years (Unit: ten thousand square meters,%)
Data source: Cement Big Data (https://data.ccement. Meanwhile, Western Construction implemented strategic layout optimization, and there was a demand for market expansion. In order to achieve the strategic goal, the western construction deeply participates in the market competition, and promotes the market share of key regions through the form of price for quantity. In this context, in 2024, the average sales price of concrete business in western construction dropped to about 333 yuan per square meter, down 12. The decline in sales price was the main reason for the decrease in revenue. In 2024, the western construction realized business income of 20.347 billion yuan. Year-on-year decrease 11.
Figure 4: Changes in the average sales price of concrete for construction in western China in the past five years (unit: point, yuan/m3)
Data source: Cement Big Data (https://data.ccement. Among them, Hunan, Hubei and Sichuan markets have a year-on-year decline of more than 500 million yuan. The total revenue decreased by nearly 2.4 billion yuan, accounting for 51% of the total revenue reduction. In addition, the revenue reduction in traditional dominant markets such as Shaanxi and Xinjiang also exceeded 200 million yuan, with a decline of 10% -20%.
At the same time, the site layout of Western Construction in key strategic development areas at home and abroad has been gradually improved, gradually releasing business growth potential, and achieving a substantial increase in revenue in many markets. Among them, Shandong and Hainan markets witnessed explosive growth, with revenue increments reaching 644 million yuan and 624 million yuan respectively, up 165.21% and 129.65% year-on-year, while revenue rankings jumped from 20th and 15th to 7th and 6th respectively; The second is the Guangdong market, with an annual revenue increment of 404 million yuan, an increase of 24.68% over the same period last year, making it the second largest business market in the western construction; Thirdly, in Anhui and Indonesia markets, revenue increased by 144 million yuan and 1.
Overall, in 2024, the proportion of revenue in traditional dominant markets such as Sichuan, Hunan, Hubei, Shaanxi and Xinjiang dropped to 33.76%, which was 8.87 percentage points lower than that in 2023; Revenue in major strategic regions such as Beijing-Tianjin-Hebei, Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Free Trade Port accounted for 39.75%, up about 4.88 percentage points from the same period last year; Overseas markets such as Indonesia, Thailand, Malaysia and Cambodia accounted for 1.52% of the total revenue, an increase of about 0% over the same period last year. The data show that the western construction has implemented strategic contraction in the traditional dominant markets, and the growth potential of new market business has been gradually released, becoming the main source of revenue, and the strategic layout optimization has achieved phased results.
Figure 5: Changes in revenue of western construction by region in 2024 (Unit: 10,000 yuan)
Data source: Cement Big Data (https://data.ccement. In this context, the market competition of the upstream and downstream industrial chains of building materials is generally intensified. The cost of raw materials and the sales price of commercial mixing showed a downward trend. Specifically, in 2024, the unit price and cost of concrete business in western construction dropped to 346 yuan per square meter and 320 yuan per square meter respectively, with a year-on-year decline of 11.55% and 7.
Although the cost of raw materials in western construction was reduced by centralized procurement and other measures, the operating cost was reduced on the basis of the growth of commercial mixed sales. However, in order to adjust the strategic layout, the company must deeply participate in the market competition in order to achieve sales growth in the target market. As a result, the decrease in the sales price of the commercial mixed business of Western Construction was significantly greater than that of the cost side, the profit margin was further significantly reduced, and the net profit attributable to the parent company dropped to -263 million yuan, a year-on-year decrease of 140.
Affected by this, the turnover days of accounts receivable and bills of Western Construction increased to 409.51 days, representing a year-on-year increase of 15.39%, and the provision for credit impairment losses reached RMB215 million.
At the same time, the company's book capital continued to flow out, the balance of cash and cash equivalents at the end of the period dropped to 3.284 billion yuan, a decrease of 14.92%, and the cash ratio dropped to 17.07%. Year-on-year decline 1.
Table 2: Operation of some financial indicators of western construction in 2022-2024 (Unit: 100 million yuan, day,%)
Data source: Cement Big Data (in terms of profitability of https://data.ccement., As the real estate market has not yet reversed the downward trend of investment and construction, the competition in the concrete industry has increased in the short term, and the price of concrete will probably remain low during the year. At the same time, the upstream raw material side has a strong willingness to raise prices, and concrete enterprises will still face cost pressures. Affected by the above factors, the profit margin of the western construction concrete business is still relatively limited, and there is uncertainty in turning losses into profits.
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