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Source40martyrsbingoChangjiang Commercial Daily
Li Jie, a reporter from Changjiang Business Daily
Achievements in promoting integration and transformation, Huaxin cement (600801)40martyrsbingo.SH 、 0665540martyrsbingoHK) under the pressure of the overall development of the industry, it has still made eye-catching achievements.
In 2023, Huaxin cement achieved an operating income of 33.757 billion yuan, an increase of 10.79% over the same period last year, and a net profit of 2.762 billion yuan, an increase of 2.34% over the same period last year. Since the beginning of this year, with the volume and price of the cement market falling and the whole industry facing losses, Huaxin cement achieved an operating income of 7.084 billion yuan in the first quarter and a net profit of 177 million yuan.
In the face of the declining domestic demand for cement, Li Yeqing, president of Huaxin cement, pointed out at the 2023 performance presentation meeting held on May 13 that under the current situation, the concept of the industry should change fundamentally. The core goal of the current domestic cement industry should be profit recovery, and the key to profit recovery is price. With the joint efforts of the government and the industry, the recovery of cement prices can be expected.
Going out to sea and non-cement business is a major direction for Huaxin cement to seek growth. In 2023, Huaxin cement made a breakthrough in its overseas development, with a production capacity of 20.91 million tons per year, an increase of 69 percent over the same period last year, and a revenue of 5.439 billion yuan, an increase of 30 percent over the same period last year.
Sales growth in non-cement business
In 2023, due to the slow growth of infrastructure investment, the slow repair of the real estate industry, environmental protection, energy consumption and other related policy constraints and other factors, China's building materials industry continues to "winter".
Under this background, Huaxin cement strives for progress in stability, comprehensively deepens the implementation of the strategy of "integration transformation, overseas development, new building materials business development, traditional industry + digital innovation", and its business performance is against the trend.
According to the annual report released by Huaxin cement, in 2023, the company achieved revenue of 33.757 billion yuan, an increase of 10.79% over the same period last year, a net profit of 2.762 billion yuan, an increase of 2.34% over the same period last year, and net cash flow from operating activities of 6.236 billion yuan, an increase of 36.51% over the same period last year.
By the end of 2023, Huaxin cement's cement business accounted for 57% of the company's operating income, accounting for 57% of the company's operating income, but the non-cement business increased steadily and has become an important contribution to the company's profits.
In recent years, the competition in the cement industry is becoming increasingly fierce, overcapacity, profit margins are declining, industry companies have to seek new growth points. While developing and strengthening its main business, Huaxin cement gradually began to take environmental protection, precast cement mortar, machine sand and other non-cement business as the key direction of expansion, and became the first batch of cement listed enterprises with aggregate layout and commercial mixing business.
From the perspective of leading products, Huaxin cement will continue to develop in integration in 2023, with an additional production capacity of 67 million tons and an annual production capacity of 277 million tons in aggregate business, and concrete production capacity of 122 million square meters per year, an increase of 77 percent over the same period last year. The company's high-quality machine-made sand has been officially put into production, with annual aggregate third-party sales of 131 million tons, an increase of 100% over the same period last year. Concrete business is in full swing, with a total of 23 new concrete sites for the whole year, with sales reaching 27.27 million square meters, an increase of 66% over the same period last year. In addition, the total disposal volume of environmental protection business was 3.5 million tons, an increase of 6% over the same period last year.
It is worth paying attention to that the transformation of environmental protection is also one of the important strategies for Huaxin cement to implement integrated development. Recently, Citic Securities, Wuhan Branch of China Merchants Bank and Huaxin cement completed the carbon quota repurchase transaction business in Hubei carbon market, raising more than 100 million yuan for enterprises. This is also the largest carbon quota repurchase financing business since the establishment of the national pilot carbon market.
In recent years, Huaxin cement continues to reduce the carbon emission intensity of its main products, and take more measures to speed up the pace of green transformation. Financial data show that the replacement rate of the combined calorific value of Huaxin cement Group reached 20% in 2023, an increase of 6 percentage points over 2022.
The steady development of overseas business has an annual income of 5.4 billion yuan.
At present, the cement industry is facing a severe test. Monitoring data from the Digital cement Network show that in the first quarter of this year, the country's cumulative cement production was 337 million tons, down 11.8 percent from the same period last year, the second lowest level since 2011. In this context, a number of cement listed companies in the first quarter revenue and net profit declined compared with the same period last year, and even fell into losses.
However, judging from the data disclosed in the first quarterly report of Huaxin cement, the company continues to40martyrsbingoThe steady performance of last year. In the first quarter of 2024, Huaxin cement achieved revenue of 7.084 billion yuan, an increase of 6.87% over the same period last year; net profit was 292 million yuan, up 3.28% over the same period last year; although the net profit of home and non-net profit decreased somewhat, it was still positive, at 177 million yuan and 152 million yuan respectively.
Under the influence of the domestic cement market, in recent years, many cement companies have begun to expand or extend the industrial chain overseas, providing new momentum for the company's development, and Huaxin cement is no exception.
Huaxin cement regards overseas development as one of the "four" development strategies, which is also the key development direction of the company at present. In addition, as one of the few listed companies, Huaxin cement relies on strong overseas shareholders, and the compound base provides a strong background and support for the company's internal integration of production capacity and overseas expansion.
According to the annual report, in 2023, Huaxin cement made a breakthrough in its overseas development, with a production capacity of 20.91 million tons per year, an increase of 69 percent over the same period last year, and a revenue of 5.439 billion yuan, an increase of 30 percent over the same period last year. The company has accelerated its overseas expansion and received two cement plants, and its overseas business has been expanded to the Middle East and Southern Africa. Together with the commissioning of the second phase of the cement clinker production line of 4500 tons / day by Marvini Company in Tanzania, the total production capacity has increased by 8.54 million tons per year.
Huaxin cement Li Yeqing said at the performance presentation that the current overseas market supply and demand pattern of the company is slightly balanced and rational relative to the domestic market. Huaxin cement's overseas development strategy will continue to be pushed forward. In order to cope with the risks of overseas mergers and acquisitions and changes in the relationship between supply and demand, diversified investment will be considered, because the more countries, the wider the region, the smaller and more controllable the risk.
Looking forward to future development, Huaxin cement also pointed out in the annual report that in 2024, the company will solidly promote the four strategies of "integrated transformation and development, overseas development, business development of new building materials, and traditional industry + digital innovation". Accelerate the international transformation of green intelligence, be a pioneer in low-carbon sustainable development industry, and promote Centennial Huaxin to move forward from a domestic industry leader to a world-class multinational enterprise.
From the perspective of business plans, in 2024, Huaxin Cement plans to sell approximately 63 million tons of cement and clinker, 156 million tons of aggregate, and 30.52 million square meters of concrete. The total disposal volume of environmental protection business is 4.28 million tons, and the total revenue is expected to reach 37.1 billion yuan. In addition, the company plans to spend approximately 6.9 billion yuan in 2024, focusing on the production capacity of aggregates, concrete, overseas cement and the construction of alternative fuels; total assets are expected to be approximately 73.7 billion yuan, and the asset-liability ratio is expected to remain at around 51%.