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Comprehensive comments on the 2018 semi-annual reports of listed companies in the cement industry

Comprehensive comments on the 2018 semi-annual reports of listed companies in the cement industry

  • Categories:Industrial Trend
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  • Time of issue:2018-09-11 08:10
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Comprehensive comments on the 2018 semi-annual reports of listed companies in the cement industry

(Summary description)According to the National Bureau of Statistics, the total profit of the national cement industry in the first half of 2018 was 68.87 billion yuan, a year-on-year increase of 98.66%, and the industry profit rate was 15.89%, the highest level since 2011 (11.18%). 23 cement listed companies achieved full profit............

  • Categories:Industrial Trend
  • Author:
  • Origin:
  • Time of issue:2018-09-11 08:10
  • Views:
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Comprehensive evaluation: The statistics of 23 listed cement companies show that the total revenue and net profit of the first half of this year have increased significantly year-on-year, achieving full profitability. The total sales volume of cement clinker of 14 large cement companies and regional leaders increased by 1.04% year-on-year. The average net profit rate of listed companies was higher than the industry average. This shows that the operating conditions of listed cement companies are better than the overall level of the industry. The advantages are prominent. The industry’s average debt ratio has fallen for five consecutive quarters, and risks have been further reduced. Judging from the first half of the year, compared with the substantial increase in cash flow, the willingness of cement companies to spend on capital has declined. From a single company point of view, CNBM and Conch Cement continue to occupy the top positions in revenue and net profitability of the parent company. From the perspective of profitability indicators, Qingsong Jianhua’s operating efficiency in the first half of the year is poor. Statistics on tonne data show that Conch Cement has the lowest cost per ton + expense. Less than 200 yuan/ton, the cost advantage is outstanding, the tower brand group's ton selling price, ton gross profit and ton net profit are the highest.

1. Profitability

1. Industry benefits: record high profit margins

According to the National Bureau of Statistics, the total profit of the national cement industry in the first half of 2018 was 68.87 billion yuan, a year-on-year increase of 98.66%, and the industry profit rate was 15.89%, the highest level since 2011 (11.18%). Mainly due to the increase in cement prices, the national average cement price in the first half of this year increased by about 100 yuan/ton compared with last year.

  Figure 1 and 2: The profit margin of the cement industry in the first half of 2011-2018 (%), the price of cement in the first half of 2017-2018 (yuan/ton

  Data source: China Cement Association, China Cement Network, Cement Big Data Research Institute

2. Listed company performance: full profit

According to the summary and statistics of 23 listed cement companies, the total operating income of the 23 companies in the first half of this year was 257 billion yuan, a year-on-year increase of 27.52%, and only three companies had a year-on-year decline in revenue; the total net profit attributable to the parent was 31.3 billion yuan Yuan, a year-on-year increase of 118.07%, and all companies achieved profitability. From a single company point of view, China National Building Materials after the merger of Sinoma has become more powerful, and Conch Cement takes the top spot in revenue and net profit margin. Jidong Cement, Qingsong Jianhua and Fujian Cement achieved profitability. Due to the severe decline in regional demand for building materials in Qilian Mountains and Ningxia, revenues fell.

  Table 1: Profitability of major listed cement companies in 2018H1

 Data source: Semi-annual reports of listed companies, Flush, Cement Big Data Research Institute

2. Business data competition

1. Sales of cement clinker: increase and decrease

Judging from the 14 cement companies that released sales data, five (China National Building Materials, Qilianshan, Ningxia Building Materials, Shangfeng Cement and Tianrui Cement) experienced a decline in sales in the first half of the year. In the first half of this year, the impact of the sharp decline in infrastructure in the Northwest region. The highest sales growth rates were Fujian Cement, Tower and China Resources Cement. Due to the decline in sales in 2017, China Resources Cement achieved a relatively high sales growth rate with a relatively low base. Tower Group benefited from the increase in new production capacity. Release, strong regional demand, sales rose 14.25%. The 14 companies sold 513 million tons of cement clinker in the first half of the year, a slight increase of 1.04% year-on-year.

  Table 2: Cement clinker sales of major cement listed companies in 2018H1

  Data source: Semi-annual reports of listed companies, Flush, Cement Big Data Research Institute

2. Tons of data comparison

According to the statistical calculations of some cement companies that have announced their sales in the first half of the year, the average sales price of cement clinker in the first half of the year has generally risen between 60-90 yuan over the same period last year. The lowest price per ton is Jidong Cement, and its main business area is located in South China’s tower brand and China Resources Cement have the highest average selling prices. Production costs per ton have also generally increased. In the first half of the year, Conch had the lowest cost per ton, and Tianrui Cement had the highest cost. The cost per ton is between 18-81 yuan, and the cost control level of various companies is quite different. The lowest cost per ton is tower, and the highest is Jidong Cement. The lowest cost per ton + cost is Conch Cement, which is also the only company with a cost less than 200 yuan. The cost advantage is obvious.

  Table 3: 2018H1 Major Cement Listed Companies Tonnage Data

  Data source: Semi-annual reports of listed companies, Flush, Cement Big Data Research Institute

3. Comparison of financial indicators

1. Profitability index: The profit rate of the industry has increased substantially

In the first half of 2018, the average comprehensive gross profit margin of the 23 listed cement companies was 33.19%, an increase of 8.67 percentage points over the same period last year. Except for Golden Circle and UBM Technology, the gross profit margins of other companies have increased. Golden Circle’s comprehensive gross profit margin has been lowered by the environmental protection business. UBM Technology mainly produces cement at grinding stations. The increase in raw material costs has led to its revenue And cost upside down. In the first half of the year, there were 5 companies with a gross profit margin of more than 40%, namely Sichuan Shuangma, Shangfeng, Conch, Tower and Jianfeng, an increase of 2 from the first quarter. Among the companies mainly engaged in cement clinker manufacturing, Qingsong Jianhua has the lowest gross profit margin. The average net profit margin is 17.08%, and the average net profit margin of listed companies is higher than the industry average. Among them, the company with the highest net profit margin is UBM Technology, which is mainly due to the increase in its investment income. Among the companies whose main business is cement clinker manufacturing, Qingsong Jianhua has the lowest net profit margin. In the first half of the year, Fujian Cement had the highest return on net assets, mainly due to the increase in net interest rates and higher financial leverage. Among the companies mainly engaged in cement clinker manufacturing, Qingsong Jianhua had the lowest return on net assets. Judging from the profit indicators of cement clinker in the first half of this year, Qingsong Jianhua has the worst operating efficiency among the 23 listed companies.

  Table 4: Profit indicators of major cement listed companies in 2018H1

  Data source: Semi-annual reports of listed companies, Flush, Cement Big Data Research Institute

2. Capital structure: the industry average debt ratio continues to decline

The industry's average asset-liability ratio has declined for five consecutive quarters since the second half of 2017. At the end of the first half of 2018, it was 45.68%, a decrease of 1.9 percentage points from the previous quarter.

  Figure 3: Average asset-liability ratio of listed companies in the cement industry (quarterly, %)

 Data source: semi-annual reports of listed companies, China Cement Network, Cement Big Data Research Institute

In terms of major companies, the two companies with the highest debt ratio (over 70%) are China National Building Materials and Jidong Cement. Compared with the first quarter, Fujian Cement and BBMG are missing; the low debt ratio camp (less than 30%) has 5 The homes are Conch Cement, Tower Group, Sichuan Shuangma, UBM Technology and Jianfeng Group.

  Table 5: Capital structure of major companies on June 30, 2018

  Data source: Semi-annual reports of listed companies, Flush, Cement Big Data Research Institute

3. Short-term solvency: liquidity and quick ratio continue to increase

As of the end of the first half of the year, the industry’s average current ratio and quick ratio were 1.25 and 0.81. The industry’s overall debt servicing capacity has increased and risks have been further reduced.

  Figure 4: Industry average current ratio and quick ratio

  Data source: semi-annual reports of listed companies, China Cement Network, Cement Big Data Research Institute

4. Cash flow analysis: increase in cash and decrease in willingness to spend on capital

In the first half of the year, the total net operating cash inflows of major cement listed companies increased by 133.73% year-on-year, and the net cash outflows from financing activities increased by 489.67%. Total capital expenditure increased by 22.7% year-on-year, and only 8 of the 20 companies included in the statistics achieved capital expenditure growth. The main increase in capital expenditure came from CNBM. As of the end of the first half of 2018, major cement companies had a total of 85.8 billion yuan in cash, a year-on-year increase of 40.33%. On the whole, cement companies are more inclined to repay more debts and reduce leverage due to the improvement of the industry's economic benefits and the full cash in hand, and no significant increase in reinvestment.

  Table 6: Analysis of total cash flow of major cement listed companies

This article is transferred from China Cement Network

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