Company Overview - CNBM is the world's largest cement producer, concrete producer, glass fiber producer, gypsum board producer, wind turbine blade producer, and light steel keel producer[6] - CNBM's total issued share capital as of December 31, 2022, was 8,434,770,662 shares[6] - CNBM's H-shares were listed on the Hong Kong Stock Exchange on March 23, 2006, with stock code 03323[6] - CNBM completed a share swap with Sinoma in 2018[6] - CNBM's main businesses include basic building materials, new materials, and engineering technical services[6] - CNBM's board of directors includes Chairman Zhou Yuxian and President Wei Rushan[7] - CNBM's registered office is located at No. 17 Fuxing Road, Haidian District, Beijing, China[10] - CNBM's international auditor is Deloitte Touche Tohmatsu[11] - CNBM's domestic auditor is Dahua Certified Public Accountants[11] - CNBM's H-share share registrar is Tricor Tengis Limited[11] Financial Performance - Revenue for 2022 decreased by 16.5% to RMB 230.17 billion compared to RMB 275.62 billion in 2021[17] - Gross profit for 2022 dropped by 40.7% to RMB 38.99 billion from RMB 65.73 billion in 2021[17] - Net profit attributable to equity holders of the company fell by 51.2% to RMB 7.96 billion in 2022 from RMB 16.30 billion in 2021[17] - Total assets increased by 4.0% to RMB 482.47 billion in 2022 from RMB 464.00 billion in 2021[18] - Total liabilities rose by 1.9% to RMB 290.13 billion in 2022 from RMB 284.72 billion in 2021[18] - Net assets grew by 7.3% to RMB 192.34 billion in 2022 from RMB 179.28 billion in 2021[18] - Non-controlling interests increased by 17.5% to RMB 70.54 billion in 2022 from RMB 60.06 billion in 2021[18] - The company's equity attributable to equity holders increased by 3.5% to RMB 105.97 billion in 2022 from RMB 102.41 billion in 2021[18] - The asset-liability ratio slightly increased by 0.1 percentage points to 36.1% in 2022[18] - The net debt ratio decreased by 0.9 percentage points to 77.0% in 2022[18] - Revenue decreased by 16.5% from RMB 275,618.6 million in 2021 to RMB 230,167.7 million in 2022, primarily due to a decline in the basic materials and engineering services segments[62][63] - Net profit attributable to equity holders dropped by 51.2% from RMB 16,299.9 million in 2021 to RMB 7,961.6 million in 2022, with net profit margin declining from 5.9% to 3.5%[62][74] - Basic materials segment revenue fell by 21.5% to RMB 147,230.5 million in 2022, driven by lower average selling prices and sales volumes of cement and concrete products[75] - Gross profit of the basic materials segment decreased by 51.8% to RMB 21,757.1 million in 2022, with gross margin dropping from 24.0% to 14.8% due to rising coal prices and lower product prices[78] - Revenue of the New Materials division increased slightly by 0.1% from RMB 45,584.4 million in 2021 to RMB 45,647.8 million in 2022, driven by higher average selling prices of gypsum boards, glass fiber yarn, and lithium battery separators[80] - Gross profit of the New Materials division decreased by 12.8% from RMB 12,653.6 million in 2021 to RMB 11,030.2 million in 2022, with the gross margin dropping from 27.8% to 24.2%[83] - Revenue of the Engineering Technology Services division decreased by 19.3% from RMB 47,250.1 million in 2021 to RMB 38,109.7 million in 2022[86] - Gross profit of the Engineering Technology Services division decreased by 24.6% from RMB 8,083.5 million in 2021 to RMB 6,091.8 million in 2022, with the gross margin dropping from 17.1% to 16.0%[88] - Operating profit of the Basic Materials division decreased by 56.0% from RMB 26,152.0 million in 2021 to RMB 11,502.0 million in 2022, with the operating profit margin dropping from 13.9% to 7.8%[79] Sales and Production Volume - Cement sales volume decreased by 15.2% to 281,523 thousand tons in 2022 compared to 2021[20] - Clinker sales volume decreased by 13.2% to 35,080 thousand tons in 2022 compared to 2021[20] - Combined cement and clinker sales volume decreased by 15.0% to 316,603 thousand tons in 2022 compared to 2021[20] - Gypsum board sales volume decreased by 12.0% to 2,092.7 million square meters in 2022 compared to 2021[21] - Wind turbine blade sales volume increased by 29.8% to 20,621 MW in 2022 compared to 2021[21] - Lithium battery separator sales volume increased by 65.3% to 1,133.3 million square meters in 2022 compared to 2021[21] - Engineering technical service revenue decreased by 19.3% to RMB 38,109.7 million in 2022 compared to 2021[22] - The company's consolidated revenue decreased by 16.5% to RMB 230,168 million in 2022 compared to 2021[26] - Profit attributable to equity holders decreased by 51.2% to RMB 7,962 million in 2022 compared to 2021[26] Strategic Goals and Development - The company aims to build a world-class materials enterprise in 2023, focusing on improving core competitiveness and enhancing core functions as the two key drivers of high-quality development[27] - The company aims to achieve a GDP growth target of around 5% in 2023, focusing on stabilizing growth, industrial transformation, innovation-driven development, and green initiatives[105] - The company plans to deepen supply-side structural reforms, optimize industry ecology, and promote high-quality development in the building materials sector[105] - Emphasis on digital transformation, including the development of intelligent factories and digital mines, to enhance production efficiency[107] - Accelerating green energy transition by increasing the proportion of photovoltaic and wind power, and improving energy utilization efficiency[107] - Expanding international presence, particularly in "Belt and Road" countries, leveraging overseas projects and funding[108] - Strengthening corporate governance and market-oriented mechanisms, with a focus on long-term incentive tools to align individual and company interests[108] - Enhancing value creation through capital operations, business integration in the building materials and new materials sectors, and improving core competitiveness[108] Industry and Market Trends - In 2022, the company's cement production volume decreased by 10.5% to 2.13 billion tons, the lowest in nearly a decade, due to weak demand and a downturn in the real estate market[34] - The cement industry's total profit in 2022 was approximately RMB 68 billion, a year-on-year decrease of about 60%[34] - The company added 54 million tons of aggregate production capacity in 2022 as part of its "cement+" strategy[34] - China's GDP in 2022 reached RMB 121.02 trillion, a year-on-year increase of 3.0%, with infrastructure investment growing by 9.4% year-on-year[32] - The urbanization rate in China reached 65.2% at the end of 2022, an increase of 0.5 percentage points from the previous year[32] - Glass fiber market demand weakened in 2022, with industry profitability declining due to rising raw material and natural gas prices[37] - Wind power installed capacity reached 370 million kilowatts in 2022, a year-on-year increase of 11.2%[42] - Global demand for lithium battery separators reached 15.7 billion square meters in 2022, a year-on-year increase of 60%[45] - Carbon fiber production capacity in China has become the largest globally, with significant progress in T1100 high-performance carbon fiber technology[46] - Waterproof material industry output decreased by 15.4% in 2022, marking the first decline in the industry[48] - Hydrogen energy cylinder demand increased significantly, with a new base for 100,000 hydrogen cylinders planned in Chengdu and progress in 70MPa Type IV hydrogen cylinder technology[50] - Coatings industry faced weak demand but stabilized profits due to lower raw material prices, with focus on differentiation in architectural coatings and specialization in industrial coatings[52] - International market share for cement technology and equipment remained global leader, with a 16% YoY increase in localized engineering contracts and green energy contracts exceeding RMB 1.5 billion[53] Corporate Governance and Board Activities - The company's Board of Directors held 12 meetings in 2022, focusing on strategic decisions, major investments, and personnel appointments[113] - The company has fully complied with the Corporate Governance Code as of December 31, 2022, ensuring robust governance and risk management[111] - The company's Board of Directors held 12 meetings in 2022, with all non-executive directors attending all meetings[115] - The company has 5 independent non-executive directors, meeting the minimum requirement under the Listing Rules[119] - The Board of Directors is responsible for major decisions including annual financial budgets, profit distribution, and major acquisitions[117] - The company provides regular training and development programs for directors to ensure they have the necessary knowledge and skills[120] - Directors receive monthly and weekly reports covering operational updates, industry trends, and capital market analysis[121] - The company's management, led by the President, is responsible for daily operations and implementing operational decisions[118] - The company ensures directors are fully informed through regular communication and timely reporting from management[118] - Independent non-executive directors provide independent professional opinions on strategic, policy, and investment matters[119] - The company's Board of Directors closely monitors major projects and ensures efficient operations through scientific decision-making[117] - The company's governance structure ensures a balanced and high-quality decision-making process[119] - The company organized multiple training sessions for its directors in 2022, focusing on legal compliance, corporate governance, and international economic trends[122][123] - Independent non-executive directors participated in various training programs, including those on legal responsibilities, information disclosure, and corporate governance[123] - The company conducted an online research session with independent directors and supervisors to discuss operational strategies, international development, and green initiatives[123] - The Strategic Decision Committee reviewed and approved the company's 2021 performance and 2022 work arrangements, as well as the 2022 investment plan[129] - The Nomination Committee underwent changes in 2022, with Zhou Yuxian appointed as the chairman and Sun Yanjun stepping down from the role[130] - The company has established a Board Diversity Policy to enhance corporate governance, ensuring a diverse range of skills, professional and industry experience, cultural and educational backgrounds, ethnicity, tenure, gender, and age among board members[132] - The board currently includes two female members, and the company aims to maintain or increase this proportion in the future[132] - The Nomination Committee has reviewed the Board Diversity Policy and confirmed that the current board members meet the diversity requirements, which supports the company's governance and operational standards[133] - The Nomination Committee follows a detailed process for nominating directors, including internal and external searches, background checks, and consideration of factors such as character, qualifications, and potential contributions to board diversity[134] - In 2022, the Nomination Committee held multiple meetings to review and approve proposals related to the adjustment of subsidiary directors and supervisors, board structure, and the appointment of key executives[135] - The Remuneration and Assessment Committee is responsible for recommending and reviewing the specific remuneration and performance of directors and senior management, with compensation structured into base salary, performance-based salary, special awards, and stock appreciation rights[137] - The Remuneration and Assessment Committee held its first meeting in 2022 to discuss and approve matters related to the remuneration of senior executives[138] - The Audit Committee reviewed the financial reports and performance for the year ended December 31, 2022, ensuring compliance with internal controls and risk management[139][141] - The Audit Committee provided recommendations to the Board on improving corporate governance policies and the continuous development of directors and senior management[141] - The Board is responsible for preparing financial statements that truly and fairly reflect the company's financial position, with management providing key operational data[141] - The Environmental, Social, and Governance (ESG) Committee was established on March 24, 2023, to oversee ESG-related risks and opportunities[142] - The ESG Committee is responsible for formulating and reviewing the company's ESG vision, goals, and strategies, reporting significant ESG matters to the Board[143] - The Nomination Committee proposed Liu Yan and Wei Rushan as candidates for the 5th Board of Directors, approved by the Board and shareholders[145] - The company has established mechanisms to ensure the independence of independent non-executive directors, including regular communication and on-site inspections[146][147] - Independent non-executive directors can engage external professional opinions at the company's expense to support their duties[147] - The company paid a total of RMB 6.439 million for audit and non-audit services in 2022, with RMB 5.35 million for annual audit services and RMB 1.089 million for non-audit services[148] - The company held five shareholder meetings in 2022, including one annual general meeting, two class meetings, and two extraordinary general meetings[152] - The company's risk management and internal control system includes daily monitoring mechanisms and annual evaluation and supervision mechanisms, with departments responsible for identifying, managing, and reporting risks[155] - The company established an internal control system and compliance management committee to strengthen risk management and internal control, in line with domestic laws and regulations and listing rules[154] - The company's board of directors approved three special resolutions at the 2021 annual general meeting, including authorizing the board to issue new shares and repurchase H shares[151] - The company's supervisory board consists of three shareholder representatives, three employee representatives, and two independent supervisors, responsible for overseeing financial and operational compliance[153] - The company held two extraordinary general meetings in 2022, approving resolutions related to restructuring and revised related party transaction limits[152] - The company's internal control system includes setting quantitative and qualitative standards for defect evaluation, categorizing defects as major, significant, or general based on their impact[155] - The company's risk management framework assesses risks based on probability and impact, categorizing them into five levels from very severe to minor[155] - The company requires subsidiaries to prepare a "Major Risk Tracking and Monitoring Table" quarterly to monitor and prevent risks faced by the group[155] - The company's internal control system is designed to manage risks and ensure reasonable assurance against significant misstatements or losses, with the Board of Directors (via the Audit Committee) responsible for its effectiveness[157] - The company has established procedures for handling and disclosing insider information, involving legal compliance and the Board Secretariat, with announcements made on the company and HKEX websites[158] - The company revised its articles of association in 2022, with changes approved by the Board of Directors and the second extraordinary general meeting of shareholders[159] - The company places high importance on investor relations, utilizing various communication channels such as shareholder meetings, earnings releases, roadshows, and investor summits to enhance transparency and governance[160] - The company received multiple awards in 2022, including the "Best Investor Relations Award" for Hong Kong-listed companies and recognition in ESG-related indices and rankings[161][163] - The company's Board of Directors reviewed and confirmed the effectiveness of the company's risk management and internal control systems, ensuring compliance with relevant codes and regulations[157] - The company's investor relations management includes a dedicated Board Secretariat, a comprehensive investor relations management system, and a multi-channel communication mechanism[160] - The company's internal audit and financial reporting budgets are reviewed annually to ensure adequate resources and employee qualifications[157] - The company's major transactions are subject to internal review by legal compliance and the Board Secretariat, with legal consultation and board approval required for insider information disclosures[158] - The company's investor relations efforts include the formulation of a "Quality Improvement Plan for Listed Companies" to strengthen investor relations and market value management[160] Dividend and Shareholder Information - The company plans to distribute a final dividend of RMB 3,188,343,310.24 (tax included) for the period from January 1, 2022, to December 31, 2022, based on 8,434,770,662 issued shares, amounting to RMB 0.378 per share (tax included)[168] - The final dividend per share will depend on the number of issued shares on May 10, 2023[168] - The company's dividend policy, established in 2019, ensures sufficient cash reserves to meet funding needs, future growth, and equity value[169] - Non-resident enterprise shareholders will have a 10% corporate income tax withheld on the final dividend[170] - Mainland corporate investors holding H-shares for 12 consecutive months are exempt from corporate income tax on dividends[170] - Individual H-shareholders will have a 20% personal income tax withheld on dividends, with exceptions for certain tax treaties[171] - Hong Kong and Macau residents, as well as those from countries with a 10% dividend tax rate treaty with China, will have a 10% personal income tax withheld[172] - Individual H-shareholders from countries with a tax treaty rate lower than 10% must submit relevant documents by May 11, 2023, to enjoy the treaty benefits[173] - Individual H-shareholders from countries with a tax treaty rate higher than 10% but lower than 20% will have taxes withheld at the actual treaty rate[173] - Individual H-shareholders from countries with a 20% tax treaty rate or no treaty will have a 20% personal income tax withheld[173] - The company will suspend share transfer registration from April 25, 2023, to April 28, 2023, to determine
中国建材(03323) - 2022 - 年度财报