Production and Technology - The company's clinker production lines are all equipped with advanced NSP technology and waste heat recovery power generation technology, effectively reducing electricity costs and pollution[5] - The Zhengzhou Xingyang clinker production line, with a daily production capacity of over 12,000 tons, has been operating smoothly and efficiently since its commissioning in 2009[5] - The company has upgraded multiple production and management processes to achieve "unmanned" operations, with several enterprises upgraded to smart factories[5] - The company is actively involved in the construction of smart mines in Zhengzhou Xingyang[5] Regional Operations and Resources - The company has a strong presence in Henan and Liaoning provinces, with additional operations in Tianjin and Anhui, forming three core regional markets[5] - The company has abundant limestone resources and mixed material supplies in Henan, Anhui, and Liaoning provinces, with plans to acquire more quarries[5] - The company's production facilities are strategically located along major highways and railway lines in Henan, Liaoning, Tianjin, and Anhui[12] - The company's production facilities are concentrated in the central and northeastern regions of China, including Henan, Anhui, Liaoning, and Tianjin[12] Environmental and Sustainability Initiatives - The company is committed to environmental protection and sustainable development, investing in waste heat recovery, dust recovery, and low nitrogen oxide emission facilities[6] - The company is a member of the World Business Council for Sustainable Development's Cement Sustainability Initiative (CSI), being one of the first three Chinese cement companies to be accepted[6] Production Capacity and Joint Ventures - The company has a total annual production capacity of 28.4 million tons of clinker and 56.4 million tons of cement as of December 31, 2023[12] - In the Henan region (including Anhui), the cement production capacity is 37.3 million tons and clinker production capacity is 20.0 million tons[12] - In the Liaoning region (including Tianjin), the cement production capacity is 19.1 million tons and clinker production capacity is 8.4 million tons[12] - The company holds a 40% direct equity stake in a joint venture operating 2 new dry-process clinker production lines with an annual capacity of 3.1 million tons[12] - The company's attributable production capacity is approximately 29.6 million tons of clinker and 56.4 million tons of cement as of December 31, 2023[12] - The company has 13 aggregate production lines with a total capacity of 30.2 million tons as of December 31, 2023[12] Financial Performance - Revenue for 2023 was RMB 7,888.8 million, a decrease of 28.6% compared to RMB 11,055.4 million in 2022[14][16] - Net loss attributable to the company's owners was RMB 633.9 million in 2023, compared to a profit of RMB 448.7 million in 2022[14][16] - Cement sales volume in 2023 was 25.2 million tons, a decrease of 9.0% from 27.7 million tons in 2022[16] - Average cement price in 2023 was RMB 241.5 per ton, a decrease of 21.8% from RMB 308.7 per ton in 2022[16] - Limestone aggregate sales volume in 2023 was 43.6 million tons, an increase of 4.1% from 41.9 million tons in 2022[16] - Average limestone aggregate price in 2023 was RMB 34.5 per ton, a decrease of 12.6% from RMB 39.5 per ton in 2022[16] - Clinker sales volume in 2023 was 1.3 million tons, a decrease of 51.9% from 2.7 million tons in 2022[16] - Total assets increased to RMB 40,573.5 million in 2023 from RMB 32,343.6 million in 2022[15] - Total liabilities increased to RMB 24,787.4 million in 2023 from RMB 15,753.5 million in 2022[15] - Equity attributable to the company's owners decreased to RMB 15,466.4 million in 2023 from RMB 16,314.8 million in 2022[15] - Revenue in 2023 was approximately RMB 7,888.8 million, a decrease of RMB 3,166.6 million or 28.6% compared to 2022[19] - Revenue from cement sales in 2023 was approximately RMB 6,087.3 million, a decrease of RMB 2,465.4 million or 28.8% compared to 2022[19] - Cement sales volume decreased by 2.5 million tons to approximately 25.2 million tons in 2023, a decrease of 9.0% compared to 2022[19] - Revenue from limestone aggregate sales in 2023 was approximately RMB 1,502.8 million, a decrease of RMB 150.2 million or 9.1% compared to 2022[19] - Sales revenue in the Central China region in 2023 was approximately RMB 6,449.4 million, a decrease of RMB 2,385.6 million or 27.0% compared to 2022[20] - Sales revenue in the Northeast China region in 2023 was approximately RMB 1,439.5 million, a decrease of RMB 780.9 million or 35.2% compared to 2022[20] - Gross profit in 2023 was approximately RMB 1,629.3 million, a decrease of RMB 1,084.5 million or 40.0% compared to 2022[22] - EBITDA in 2023 was RMB 1,476.5 million, a decrease of RMB 1,442.0 million or 49.4% compared to 2022[23] - Pre-tax loss in 2023 was approximately RMB 629.8 million, compared to a pre-tax profit of RMB 687.9 million in 2022[26] - Income tax credit in 2023 was approximately RMB 6.3 million, compared to an income tax expense of RMB 148.6 million in 2022[26] - Other expenses decreased by RMB 40.1 million or 36.4% to RMB 70.0 million in 2023 compared to RMB 110.1 million in 2022, mainly due to reduced seasonal shutdown costs[27] - The company recorded a loss attributable to owners of RMB 633.9 million in 2023, compared to a profit of RMB 448.7 million in 2022[27] - Financial expenses increased by RMB 118.7 million or 11.5% to RMB 1,152.1 million in 2023 from RMB 1,033.4 million in 2022, primarily due to increased borrowing scale[27] - Trade and other receivables increased from RMB 9,240.2 million in 2022 to RMB 19,606.2 million in 2023, mainly due to increased bills receivable and prepayments to suppliers[28] - Cash and bank balances increased by RMB 187.0 million or 18.9% to RMB 1,174.8 million in 2023 from RMB 987.8 million in 2022, driven by net cash flows from operating, investing, and financing activities[30] - Total borrowings and bonds increased by RMB 8,955.9 million or 93.1% to RMB 18,578.6 million in 2023 from RMB 9,622.7 million in 2022[32] - The company's gearing ratio increased to 61.1% in 2023 from 48.7% in 2022, a rise of 12.4 percentage points[32] - Net debt ratio increased to 79.3% in 2023 from 24.9% in 2022, a rise of 54.4 percentage points[33] - Capital expenditures decreased to RMB 639.4 million in 2023 from RMB 936.6 million in 2022[35] - Assets pledged as collateral for bank borrowings amounted to RMB 4,030.0 million in 2023, compared to RMB 3,847.6 million in 2022[36] Risk Management and Liquidity - The company has established a liquidity risk management system to monitor and maintain appropriate levels of cash and cash equivalents, ensuring operational funding and reducing the impact of cash flow volatility[39] - The company faces currency risk due to operations primarily denominated in RMB, with some bank balances and borrowings in HKD or USD, and currently has no foreign currency hedging policy[40] Employee and Workforce - In 2023, the company had 6,892 employees (down from 7,299 in 2022) with employee costs of approximately RMB 562.3 million (compared to RMB 564.7 million in 2022)[41] Government and Market Outlook - The Chinese government's 2024 work report emphasizes stable economic growth, with a general public budget expenditure of RMB 28.5 trillion, an increase of RMB 1.1 trillion from the previous year[42] - The company expects the national cement market prices to continue fluctuating and plans to focus on cost reduction and market expansion to improve profitability in 2024[43] - The company aims to implement energy consumption and emission control measures, optimize production processes, and enhance market competitiveness in 2024[44] - A new national standard for general Portland cement (GB 175–2023) will be implemented from June 1, 2024, which is expected to eliminate low-quality cement products and reduce market supply[45] - The company plans to strengthen internal management, stabilize existing customers, and explore new markets, including high-grade cement for key projects and low-grade cement for civilian use[46] - The company will continue to extend its industrial chain, explore new energy businesses, and promote intelligent and green development to seek new profit growth points[46] Corporate Governance and Board Structure - The board of directors consists of nine members, including five executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2023[47][48] - Li Liufa, aged 66, is the founder of the group and has been a non-executive director since July 2, 2011, and a member of the nomination committee since June 15, 2018. He is responsible for the overall strategic planning and business management of the group[49] - Li Xuanyu, aged 37, was appointed as an executive director and chairman of the board on October 21, 2022. He has extensive experience in administration and corporate management and holds multiple leadership positions within the group and its subsidiaries[50] - Li Fengluan, aged 61, has been an executive director since January 18, 2018, with over 30 years of experience in finance, accounting, auditing, and operational management. She holds a CPA qualification in China[50] - Ding Jifeng, aged 54, has been an executive director since May 15, 2017, and is the general manager of Tianrui Cement Group Co., Ltd. He has extensive experience in the cement industry and is responsible for the daily operations of the company[51] - Xu Wuxue, aged 48, has been an executive director and CFO since May 11, 2013, with extensive experience in finance and accounting. He has held various financial leadership roles within the group[52] - Li Jiangming, aged 46, has been an executive director since June 11, 2014, and is responsible for capital market financing and investor relations. He has extensive experience in capital operations[52] - Kong Xiangzhong, aged 69, has been an independent non-executive director since December 24, 2012, and serves as the chairman of the nomination committee and a member of the audit and remuneration committees[53] - Kong Xiansheng is the Executive President of the China Cement Association, a professor-level senior engineer, and an expert enjoying special government allowances from the State Council[54] - Wang Ping has nearly 20 years of experience in corporate finance, auditing, accounting, and taxation, and currently serves as an independent non-executive director for multiple listed companies[54] - Du Xiaotang has extensive experience in corporate finance, capital markets, private equity investment, mergers and acquisitions, and legal compliance consulting for listed companies[56] - Li Fengluan is the Chairman of Tianrui Cement Group Co., Ltd., with detailed experience outlined in the "Directors" section[56] - Ding Jifeng is the General Manager of Tianrui Cement Group Co., Ltd., with detailed experience outlined in the "Directors" section[56] - Jing Xianyu has rich experience in the cement industry and has held various senior management positions within the group since joining in 2000[56] - Xu Wuxue serves as the Chief Financial Officer of the company and the Financial Director of Tianrui Cement Group Co., Ltd.[57] - Li Jiangming is the Deputy General Manager of Tianrui Cement Group Co., Ltd. and the Chief Representative for Hong Kong business[58] - Lü Xing is the Deputy Financial Director of the company and the Chief Accountant of Tianrui Cement Group Co., Ltd., with extensive experience in financial reporting and analysis[58] - Li Tao is the Deputy General Manager and Head of the Quality Department of Tianrui Cement Group Co., Ltd., with a background in quality engineering and cement production[58] Financial Reserves and Dividends - The company's distributable reserves as of December 31, 2023, were RMB 1,683 million, compared to RMB 1,746 million in the previous year[61] - The company did not recommend a final dividend for the year ended December 31, 2023, consistent with the previous year[60] Subsidiaries and Financial Statements - The company's major subsidiaries are detailed in Note 50 of the consolidated financial statements, primarily engaged in limestone mining, clinker, and cement production, sales, and distribution[60] - The company's property, plant, and equipment changes during the year are detailed in Note 17 of the consolidated financial statements[60] - Bank loans and other borrowings details are provided in Notes 32, 33, 34, and 36 of the consolidated financial statements[60] - The company's public shareholding percentage remained compliant with the Hong Kong Stock Exchange's minimum public float requirements[61] - The company's directors and senior management held approximately 69.58% of the company's shares through controlled entities as of December 31, 2023[66] - During the year, the company released and re-pledged shares as loan guarantees, with 180 million shares released and 160 million shares re-pledged on January 9, 2023, and 70 million shares released and 45 million shares re-pledged on September 11, 2023[67] - The company did not have any share capital changes during the year ended December 31, 2023[60] - The company's reserves and equity changes are detailed in the consolidated statement of changes in equity[60] - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2023[69] - The company's financial and operational independence from Pingdingshan Ruiping Shilong was confirmed as of December 31, 2023[71] - The company holds the option to acquire shares in Shanshui Cement but decided not to exercise it at this stage, considering its recent performance[72] - The company's directors and controlling shareholders did not have any interests in businesses competing with the group as of December 31, 2023[73] - The independent non-executive directors reviewed and confirmed compliance with the non-compete deed by the controlling shareholders[74] - The company made contributions of RMB 49.3 million to employee welfare plans during the year ended December 31, 2023[77] Shareholding and Loans - Yukuo holds 2,044,484,822 shares, representing 69.58% of the company's total shares[80] - China Huarong Asset Management holds 470,000,000 shares, representing 16.00% of the company's total shares[80] - Yukuo pledged 160,000,000 shares as collateral for a loan on January 9, 2023[81] - Yukuo pledged 45,000,000 shares as collateral for a loan on September 11, 2023[81] - Loan A of RMB 80,000,000 was secured by 45,000,000 shares, representing 1.53% of the company's total shares[83] - Loan B of USD 29,570,000 was secured by 140,000,000 shares, representing 4.76% of the company's total shares[84] - Loan C of RMB 173,000,000 was secured by 160,000,000 shares, representing 5.45% of the company's total shares[84] - Loan D of RMB 166,500,000 was secured by 97,000,000 shares, representing 3.3% of the company's total shares[84] - Tianrui Group must maintain at least 50% ownership of the company's total shares to avoid default on Loan A[83] - Li Liufa and Li Fenglian must jointly hold at least 51% of the company's total shares to avoid default on Loan B[84] Transactions and Guarantees - The total transaction amount for clinker purchased by Tianrui Cement from Ruiping Shilong in 2023 was RMB 136.0 million[87] - The annual cap for clinker purchase transactions under the framework agreement for 2022, 2023, and 2024 is RMB 1.2 billion each year[87] - The annual cap for limestone supply transactions under the 2021 framework agreement for 2022, 2023, and 2024 is RMB 300 million each year[89] - The total transaction amount for limestone sold by Tianrui Cement to Ruiping Shilong in 2023 was zero[89] - The maximum daily balance of guarantees provided by Tianrui Cement to Tianrui Group in 2023 was RMB 2 billion[91] - The maximum daily balance of guarantees provided by Tianrui Group to Tianrui Cement in 2023 was RMB 8.2 billion[91] - The daily balance cap for guarantees provided by Tianrui Cement under the 2022 framework agreement is RMB 3 billion annually from 2023 to 2025[92] - The daily balance cap for guarantees provided by Tianrui Group under the 2022 framework agreement is RMB 7 billion annually from 2023 to 2025[92
中国天瑞水泥(01252) - 2023 - 年度财报