海通国际(00665) - 2023 - 年度业绩

Annual Performance Summary The company reported RMB 33.76 billion in operating revenue and RMB 2.76 billion in net profit attributable to shareholders in 2023, showing 10.79% and 2.34% year-on-year growth respectively Key Financial Highlights for 2023 | Metric | 2023 (RMB) | 2022 (RMB) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 33.757 billion yuan | 30.470 billion yuan | 10.79% | | Net Profit Attributable to Shareholders | 2.762 billion yuan | 2.699 billion yuan | 2.34% | | Earnings Per Share | 1.33 yuan | 1.30 yuan | 2.31% | Company Profile Huaxin Cement Co., Ltd. is listed on both the Shanghai Stock Exchange (A-shares) and the Hong Kong Stock Exchange (H-shares), with its contact office in Wuhan, Hubei - Huaxin Cement Co., Ltd. (the Company or the Group) and its subsidiaries (the Group) are listed on the Shanghai Stock Exchange (A-share code: 600801) and The Stock Exchange of Hong Kong Limited (H-share code: 06655)[3] - Mr. Ye Jiaxing serves as the Company Secretary, and Ms. Wang Xiaoqiong as the Securities Affairs Representative, both located at Huaxin Building B, No. 426 Gaoxin Avenue, East Lake New Technology Development Zone, Wuhan, Hubei Province[4] Summary of Accounting and Business Data The company's key financial metrics for the past three years, prepared under Chinese accounting standards, show revenue growth and stable profitability Key Accounting Data and Financial Indicators for the Past Three Years (Prepared under Chinese Accounting Standards) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | Year-on-Year Change (%) | 2021 (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 33,757,087,272 | 30,470,382,363 | 10.79 | 32,464,083,379 | | Net Profit Attributable to Shareholders of Listed Company | 2,762,116,715 | 2,698,868,510 | 2.34 | 5,363,525,692 | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | 2,322,113,737 | 2,578,634,452 | -9.95 | 5,304,878,118 | | Basic Earnings Per Share (yuan/share) | 1.33 | 1.30 | 2.31 | 2.58 | | Diluted Earnings Per Share (yuan/share) | 1.32 | 1.28 | 3.13 | 2.58 | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (yuan/share) | 1.12 | 1.24 | -9.68 | 2.55 | | Weighted Average Return on Net Assets (%) | 9.82 | 10.03 | Decrease by 0.21 percentage points | 21.30 | | Return on Net Assets After Deducting Non-Recurring Gains and Losses (Fully Diluted) (%) | 8.26 | 9.58 | Decrease by 1.32 percentage points | 21.07 | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | 36.51 | 7,594,957,122 | Shareholder Information The company's shareholder structure and control remain stable, with no changes to the controlling shareholder or actual controller during the reporting period Shareholder Details As of December 31, 2023, the company had 54,007 registered shareholders, with the top ten shareholders holding a concentrated proportion of shares - As of December 31, 2023, the total number of registered shareholders was 54,007, decreasing to 49,549 as of February 29, 2024[7] Shareholding of Top Ten Registered Shareholders as of December 31, 2023 | No. | Shareholder Name | Number of Shares Held | Proportion (%) | Share Type | Pledge, Mark or Freeze Status | Shareholder Nature | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | HKSCC Nominees Limited | 734,719,919 | 35.34 | H-share | Unknown | Overseas Legal Person | | 2 | HOLCHIN B.V. | 451,333,201 | 21.71 | A-share | None | Overseas Legal Person | | 3 | Huaxin Group Co., Ltd. | 338,060,739 | 16.26 | A-share | None | State-owned Legal Person | | 4 | Hong Kong Securities Clearing Company Limited | 21,596,305 | 1.04 | A-share | None | Overseas Legal Person | | 5 | China Merchants Bank Co., Ltd. - SSE Dividend ETF | 19,910,110 | 0.96 | A-share | None | Other | | 6 | National Council for Social Security Fund 413 Portfolio | 16,050,000 | 0.77 | A-share | None | Other | | 7 | Agricultural Bank of China Co., Ltd. - ICBC Credit Suisse Innovative Power Stock Fund | 14,580,000 | 0.70 | A-share | None | Other | | 8 | ICBC Credit Suisse Fund - China Life Insurance Co., Ltd. - Participating Insurance - ICBC Credit Suisse Fund China Life Balanced Stock Portfolio Single Asset Management Plan (Available for Sale) | 11,335,516 | 0.55 | A-share | None | Other | | 9 | China Railway Wuhan Group Co., Ltd. | 11,289,600 | 0.54 | A-share | None | Unknown | | 10 | Bank of China Co., Ltd. - ICBC Credit Suisse Core Value Mixed Securities Investment Fund | 7,769,985 | 0.37 | A-share | None | Other | Controlling Shareholder and Actual Controller During the reporting period, there were no changes in the company's controlling shareholder or actual controller, which remained Holcim Limited - During the reporting period, there were no changes in the Company's controlling shareholder or actual controller[10] - As of December 31, 2023, Holcim Limited was the Company's controlling shareholder and actual controller[10] Purchase, Sale or Redemption of Listed Securities The company and its subsidiaries did not engage in any purchase, sale, or redemption of listed securities during the reporting period - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[12] Corporate Governance The company consistently complied with all applicable principles and code provisions of the Corporate Governance Code during the reporting period - The Company has consistently complied with all applicable principles and code provisions of the Corporate Governance Code as set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the reporting period[12] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers All directors and supervisors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance with its provisions during the reporting period[13] Review of Results by Audit Committee The Audit Committee, comprising five directors, reviewed the 2023 financial report and results announcement, confirming the Board's responsibility for account preparation - The Company's Audit Committee, composed of five directors, reviewed the 2023 annual financial report and results announcement, confirming the Board's responsibility for preparing the accounts[14] - Ernst & Young Hua Ming LLP (a special general partnership) has reconciled the financial figures in the preliminary announcement with the audited consolidated financial statements but has not expressed any opinion or assurance conclusion on the preliminary announcement[15][16] Management Discussion and Analysis This section discusses the company's operational performance, financial results, strategic initiatives, and future outlook for the reporting period Overview of Business Development In 2023, Huaxin Cement achieved revenue and net profit growth amidst a challenging industry, driven by strategic transformations, overseas expansion, and new building materials 2023 Operating Highlights | Metric | 2023 Data | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | 33.757 billion yuan | 10.79% | | Net Profit Attributable to Parent Company Shareholders | 2.762 billion yuan | 2.34% | | Aggregate Sales Volume | 131.37 million tons | 100% | | Concrete Sales Volume | 27.27 million cubic meters | 66% | | Aggregate Production Capacity | 277 million tons/year | 32% | | Concrete Production Capacity | 122 million cubic meters/year | 77% | | Overseas Production Capacity | 20.91 million tons/year | 69% | | Overseas Operating Revenue | 5.439 billion yuan | 30% | | Group Consolidated Heat Value Substitution Rate | 20% | Increased by 6 percentage points | | Domestic Kiln Line Comprehensive Energy Consumption | 94.7kg/tcl | 63% Reached Benchmark Level | | Domestic Ton Cement Direct CO2 Emission Intensity | 576.47 kilograms | Decreased | - The Company firmly implemented its integrated strategy, prioritized cash flow, strictly controlled financial risks, and maintained a leading accounts receivable ratio in the industry[18] - Cost benchmarking management was strengthened, leading to a 10.29% decrease in annual cement costs, with domestic cement costs decreasing by 12.79% year-on-year[18] - Breakthroughs in overseas development included the successful acquisition of 64.66% equity in Oman Cement Company SAOG and 100% equity in Natal Portland Cement Company (Pty) Ltd., expanding overseas business to the Middle East and Southern Africa[18] - Digitalization progressed steadily, successfully implementing an intelligent system for low-carbon cement manufacturing and establishing basic digital systems in overseas factories[19] - Credit ratings remained stable (CCXI AAA, Moody's Baa1), financing costs stayed low, with new financing costs decreasing to 3.21%[19] Key Operating Performance During the Reporting Period The company's operating revenue grew by 10.79% year-on-year, driven by significant increases in concrete and aggregate sales, offsetting the impact of lower cement prices Revenue and Cost Analysis In 2023, the company's operating revenue increased by 10.79%, primarily due to higher concrete and aggregate sales, despite a decline in cement and clinker prices Main Business by Product (2023 vs 2022) | Product Type | Operating Revenue (2023) | Operating Cost (2023) | Gross Profit Margin (%) (2023) | YoY Change in Operating Revenue (%) | YoY Change in Operating Cost (%) | YoY Change in Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement | 18,331,734,881 | 13,425,727,572 | 26.76 | -2.64 | -3.72 | Increase by 0.82 percentage points | | Concrete | 7,652,223,198 | 6,467,900,216 | 15.48 | 49.08 | 49.68 | Decrease by 0.33 percentage points | | Aggregate | 5,363,828,939 | 2,902,999,002 | 45.88 | 75.01 | 111.76 | Decrease by 9.39 percentage points | | Commercial Clinker | 947,002,919 | 843,819,065 | 10.90 | -46.14 | -46.5 | Increase by 0.60 percentage points | | Other | 1,462,297,335 | 1,100,968,872 | 24.71 | -13.2 | -13.17 | Decrease by 0.02 percentage points | | Total | 33,757,087,272 | 24,741,414,727 | 26.71 | 10.79 | 10.05 | Increase by 0.49 percentage points | Main Business by Region (2023 vs 2022) | Region | Operating Revenue (RMB yuan) | YoY Change in Operating Revenue (%) | | :--- | :--- | :--- | | East China | 6,816,096,064 | 25.46 | | Central China | 11,694,525,821 | 1.40 | | South China | 726,857,232 | 24.24 | | Southwest China | 9,030,192,677 | 3.84 | | Overseas | 5,489,415,478 | 29.99 | | Total | 33,757,087,272 | 10.79 | - Operating revenue increased by RMB 3.287 billion year-on-year, with concrete sales growing by 10.88 million cubic meters (66%) and aggregate sales by 65.58 million tons (100%), offsetting the impact of declining cement and clinker prices[22] - Operating costs increased by RMB 2.259 billion year-on-year, primarily due to a significant rise in concrete and aggregate sales volumes, while cement and clinker costs decreased due to lower energy costs[22] - The gross profit margin for cement and clinker increased by 1.37 percentage points, leading to an overall increase of 0.49 percentage points in the Company's sales gross profit margin for 2023 compared to the previous year[23] Cost and Expense Analysis The company's financial expenses significantly increased by 52.35% year-on-year, primarily due to higher interest payments, while sales and administrative expenses also rose Changes in Major Expense Items (Prepared under Chinese Accounting Standards) | Item | Current Period (RMB yuan) | Prior Period (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Selling Expenses | 1,518,891,019 | 1,371,820,965 | 10.72 | | Administrative Expenses | 1,819,305,056 | 1,582,539,460 | 14.96 | | Financial Expenses | 698,520,798 | 458,488,171 | 52.35 | - Financial expenses for the current period increased by 52.35% year-on-year, primarily due to higher interest payments[25] Profitability Analysis Despite a decline in domestic cement demand, the company achieved year-on-year growth in total profit and net profit attributable to shareholders through overseas expansion and an integrated strategy Profitability (2023 vs 2022) | Item | Current Period (RMB yuan) | Prior Period (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit | 4,351,500,618 | 4,022,570,540 | 8.18 | | Total Profit | 4,326,247,137 | 3,988,085,596 | 8.48 | | Net Profit Attributable to Shareholders of Listed Company | 2,762,116,715 | 2,698,868,510 | 2.34 | - The Group's total profit increased by RMB 338 million compared to the previous year, with net profit attributable to Company shareholders increasing by RMB 63 million[27] Financial Position The company's total assets grew to RMB 68.8 billion, with an optimized asset-liability ratio, and net cash flow from operating activities significantly increased by 36.51% Major Changes in Asset and Liability Position (Prepared under Chinese Accounting Standards) | Item | Current Period End (RMB yuan) | Proportion of Total Assets (%) | Prior Period End (RMB yuan) | Proportion of Total Assets (%) | YoY Change in Amount (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Accounts Receivable | 2,259,496,157 | 3.28 | 1,382,631,200 | 2.15 | 63.42 | Expansion of concrete business | | Other Current Assets | 1,459,951,396 | 2.12 | 677,454,529 | 1.05 | 115.51 | Increase in time deposits | | Construction in Progress | 3,614,814,430 | 5.25 | 6,575,465,631 | 10.24 | -45.03 | Transferred to fixed assets after commissioning of projects like billion-ton sand | | Right-of-Use Assets | 1,680,707,457 | 2.44 | 979,311,070 | 1.52 | 71.62 | Expansion of concrete business operations, increase in asset leases | | Employee Benefits Payable | 312,414,840 | 0.45 | 131,081,719 | 0.20 | 138.34 | Expansion of business scale and employee numbers, increase in short-term incentives | | Non-current Liabilities Due Within One Year | 6,720,902,895 | 9.77 | 4,427,049,341 | 6.89 | 51.81 | Some corporate bonds nearing maturity | | Lease Liabilities | 1,348,727,671 | 1.96 | 759,905,754 | 1.18 | 77.49 | Expansion of concrete business operations, increase in asset leases | | Long-term Payables | 330,821,706 | 0.48 | 2,837,076,467 | 4.42 | -88.34 | Repayment of mining rights concession fees due | | Deferred Income Tax Liabilities | 1,123,626,046 | 1.63 | 586,568,845 | 0.91 | 91.56 | Increase due to overseas M&A | | Other Comprehensive Income | -548,746,925 | -0.80 | -175,257,484 | -0.27 | 213.11 | Depreciation of overseas subsidiary currencies against RMB | Comparison of Net Cash Flows (Prepared under Chinese Accounting Standards) | Item | Current Period (RMB yuan) | Prior Period (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | 36.51 | | Net Cash Flow from Investing Activities | -6,453,904,653 | -8,383,336,829 | 23.02 | | Net Cash Flow from Financing Activities | -951,747,856 | 1,771,835,223 | -153.72 | - Net cash flow from operating activities increased by RMB 1.668 billion, primarily due to increased profitability for the year[29] - Net cash outflow from investing activities decreased by RMB 1.929 billion, mainly due to a year-on-year reduction in investment activities such as asset purchases and construction expenditures[29] - Net cash flow from financing activities decreased by RMB 2.724 billion, primarily due to increased repayment of maturing borrowings[29] Liquidity Analysis | Item | Current Period End (RMB yuan) | Prior Period End (RMB yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Interest-Bearing Debt | 16,957,076,310 | 14,494,878,839 | 16.99% | | Asset-Liability Ratio | 51.60% | 52.00% | Decrease by 0.39 percentage points | - Interest-bearing debt increased by 16.99%, mainly due to increased project-related long-term borrowings and corporate bonds; the asset-liability ratio decreased by 0.39 percentage points[30] Major Acquisitions and Disposals of Subsidiaries and Associates The company completed two significant overseas acquisitions in 2023, expanding its global business footprint into the Middle East and Southern Africa - On March 13, 2023, the Company's wholly-owned subsidiary, Huaxin (Hong Kong) International Holdings Limited, signed an agreement to acquire 59.58% equity in Oman Cement Company SAOG for a total consideration of USD 193.1 million, completing a tender offer on July 2, 2023, to ultimately hold 64.66% equity for a total consideration of USD 210.8 million[31] - On June 27, 2023, Huaxin (Hong Kong) International Holdings Limited signed an agreement to acquire 100% equity in Natal Portland Cement Company (Pty) Ltd. for a total consideration of USD 231.6 million, with the transaction completed on December 26, 2023[32] Connected Transactions During the reporting period, the Group had no connected transactions requiring disclosure under the Listing Rules - During the reporting period, the Group had no connected transactions requiring disclosure under the Listing Rules[32] 2024 Outlook In 2024, the company anticipates continued challenges in domestic demand and overcapacity but will focus on its four core strategies, green and intelligent transformation, and increased capital expenditure Industry Landscape and Trends In 2024, China's building materials industry faces challenges from weak demand and overcapacity, while green, digital, and extended industrial chains drive high-quality development - In 2024, overall domestic building materials demand is unlikely to recover, with the real estate market remaining in a deep adjustment phase, and infrastructure investment serving as a key driver for stable growth[33] - Cement industry overcapacity is intensifying, urgently requiring new approaches like dual control of energy consumption and carbon emissions to accelerate the elimination of inefficient and excess capacity[33] - Energy saving and emission reduction, green low-carbon development, digital intelligence, and industrial chain extension have become the leading directions for high-quality industry development[33] - The global economy is expected to see a weak recovery in 2024, with emerging and developing Asia, the Middle East and East Asia, and Sub-Saharan Africa regions projected to show strong economic growth[34] - Global cement demand, excluding China, is projected to increase by 2.4% year-on-year in 2024, primarily driven by growth in India, the Middle East, and Africa[35] Company Development Strategy In 2024, the company will continue to advance its four major strategies, accelerating green, intelligent, and international transformation to become a leader in low-carbon sustainable development - The Company will uphold its values of "safety first, customer-centricity, results-orientation, integrity, innovative development, and people-first," and its mission to "clean our living environment and provide reliable building materials"[36] - The Company will solidly advance its four major strategies: "integrated transformation and development, overseas expansion, new building materials business development, and traditional industry + digital innovation"[36] - Accelerate green, intelligent, and international transformation, bravely leading as a pioneer in low-carbon sustainable development, and driving century-old Huaxin from a domestic industry leader towards a world-class multinational enterprise[36] Operating Plan In 2023, the company exceeded sales targets for cement, concrete, and aggregate, and for 2024, it plans to achieve RMB 37.1 billion in total revenue with RMB 6.9 billion in capital expenditures 2023 Operating Plan Completion Status | Item | Budget Completion Rate | | :--- | :--- | | Cement and Clinker Sales Volume | 109% | | Concrete Sales Volume | 109% | | Aggregate Sales Volume | 101% | | Total Disposal Volume of Environmental Business | 78% | | Operating Revenue | 97.39% (33.757 billion yuan) | | Total Investment | 62.88% | | Total Asset Scale | 68.8 billion yuan | | Asset-Liability Ratio | 51.6% | 2024 Operating Plan | Item | Planned Target | | :--- | :--- | | Cement and Clinker Sales | Approx. 63 million tons | | Aggregate Sales | 156 million tons | | Concrete Sales | 30.52 million cubic meters | | Total Disposal Volume of Environmental Business | 4.28 million tons | | Total Revenue | Estimated 37.1 billion yuan | | Capital Expenditure | Approx. 6.9 billion yuan | | Total Assets | Estimated approx. 73.7 billion yuan | | Asset-Liability Ratio | Expected to remain around 51% | - To achieve its operating goals, the Company will adhere to the "safety and environmental protection" lifeline, strengthen compliance oversight, deeply research the market, focus on cost optimization and energy consumption reduction, firmly implement its four major strategies, and establish a sound talent management mechanism[37][38] Potential Risks The company faces risks from declining domestic cement demand, intensifying market competition, rising production costs, and complexities in international operations - Persistent decline in domestic cement demand and severe overcapacity will intensify market competition, adversely affecting the Company's operating performance[39] - Risks related to safe production and low-carbon environmental compliance, especially with the release of ultra-low emission policies for the cement industry, could lead to reputational and financial losses[39] - Production costs are continuously rising, influenced by energy market uncertainties and increased investment in technological upgrades under "dual carbon" goals[39] - International operating risks include uncertainties such as geopolitical conflicts, trade disputes, financial market volatility, differences in legal systems, and exchange rate fluctuations[39] - The Company will address these risks by promoting supply-side reform, increasing safety and environmental protection investments, implementing technological upgrades to optimize energy consumption, strengthening marketing, reducing procurement costs, improving talent mechanisms, and implementing risk hedging strategies[40] Events After the Reporting Period No significant events occurred between the end of the reporting period and the date of this announcement - No significant events occurred between the end of the reporting period and the date of this announcement[41] Proposed Dividend Distribution The Board proposes a cash dividend of RMB 0.53 per share (tax inclusive) based on the total share capital at the end of 2023, subject to shareholder approval - The Board proposes a cash dividend of RMB 0.53 per share (tax inclusive) to all shareholders, based on the Company's total share capital of 2,078,995,649 shares at the end of 2023[41] - No capitalization of capital reserves to increase share capital will be implemented for the year 2023[41] - This profit distribution plan is subject to approval at the 2023 Annual General Meeting of Shareholders[41] Financial Information This section presents the consolidated financial statements, including the balance sheet, income statement, and cash flow statement, along with detailed financial notes Consolidated Balance Sheet As of December 31, 2023, the company's total assets were RMB 68.80 billion, total liabilities RMB 35.50 billion, and total shareholders' equity RMB 33.29 billion Consolidated Balance Sheet Summary (As of December 31, 2023) | Item | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Current Assets | | | | Cash and Cash Equivalents | 5,849,465,351 | 7,038,341,792 | | Accounts Receivable | 2,259,496,157 | 1,382,631,200 | | Inventories | 3,462,938,165 | 3,405,122,012 | | Total Current Assets | 15,219,588,022 | 14,450,298,165 | | Non-current Assets | | | | Fixed Assets | 27,752,373,906 | 22,720,804,975 | | Construction in Progress | 3,614,814,430 | 6,575,465,631 | | Intangible Assets | 15,957,837,101 | 15,182,751,513 | | Total Non-current Assets | 53,580,680,241 | 49,791,378,100 | | Total Assets | 68,800,268,263 | 64,241,676,265 | | Current Liabilities | | | | Accounts Payable | 7,827,004,238 | 8,366,283,316 | | Non-current Liabilities Due Within One Year | 6,720,902,895 | 4,427,049,341 | | Total Current Liabilities | 18,934,215,066 | 16,624,884,300 | | Non-current Liabilities | | | | Long-term Borrowings | 8,623,019,715 | 7,282,088,824 | | Bonds Payable | 3,964,479,030 | 4,426,286,852 | | Total Non-current Liabilities | 16,571,170,755 | 16,778,611,504 | | Total Liabilities | 35,505,385,821 | 33,403,495,804 | | Shareholders' Equity | | | | Total Equity Attributable to Parent Company Shareholders | 28,932,949,847 | 27,446,305,028 | | Non-controlling Interests | 4,361,932,595 | 3,391,875,433 | | Total Shareholders' Equity | 33,294,882,442 | 30,838,180,461 | | Total Liabilities and Shareholders' Equity | 68,800,268,263 | 64,241,676,265 | Consolidated Income Statement In 2023, the company achieved RMB 33.76 billion in total operating revenue, a 10.79% increase, with net profit attributable to parent company shareholders rising by 2.34% to RMB 2.76 billion Consolidated Income Statement Summary (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 33,757,087,272 | 30,470,382,363 | | Total Operating Costs | 29,824,159,526 | 26,558,704,977 | | Selling Expenses | 1,518,891,019 | 1,371,820,965 | | Administrative Expenses | 1,819,305,056 | 1,582,539,460 | | Research and Development Expenses | 301,098,955 | 78,162,783 | | Financial Expenses | 698,520,798 | 458,488,171 | | Operating Profit | 4,351,500,618 | 4,022,570,540 | | Total Profit | 4,326,247,137 | 3,988,085,596 | | Income Tax Expense | 1,108,149,035 | 964,530,723 | | Net Profit | 3,218,098,102 | 3,023,554,873 | | Net Profit Attributable to Parent Company Shareholders | 2,762,116,715 | 2,698,868,510 | | Non-controlling Interests' Share of Profit or Loss | 455,981,387 | 324,686,363 | | Net Other Comprehensive Income After Tax | (422,303,449) | 239,446,671 | | Total Comprehensive Income | 2,795,794,653 | 3,263,001,544 | | Basic Earnings Per Share (yuan/share) | 1.33 | 1.30 | | Diluted Earnings Per Share (yuan/share) | 1.32 | 1.28 | Consolidated Cash Flow Statement In 2023, net cash flow from operating activities significantly increased by 36.51% to RMB 6.24 billion, while net cash flow from financing activities turned into a net outflow due to increased debt repayments Consolidated Cash Flow Statement Summary (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | | Net Cash Flow from Investing Activities | (6,453,904,653) | (8,383,336,829) | | Net Cash Flow from Financing Activities | (951,747,856) | 1,771,835,223 | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | (75,808,355) | 109,354,023 | | Net Increase in Cash and Cash Equivalents | (1,245,905,793) | (1,934,453,363) | | Cash and Cash Equivalents at End of Period | 5,370,115,985 | 6,616,021,778 | Financial Notes The financial notes provide detailed disclosures on accounts receivable, financing for accounts receivable, accounts payable, operating revenue and costs, financial expenses, income tax expenses, and earnings per share Accounts Receivable As of December 31, 2023, total accounts receivable increased significantly to RMB 2.495 billion, primarily due to the expansion of the concrete business, with a corresponding rise in bad debt provisions Accounts Receivable Aging Analysis (As of December 31, 2023) | Aging | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Within 6 months | 1,774,340,469 | 1,130,096,842 | | 6-12 months | 327,137,999 | 164,377,772 | | 1 to 2 years | 228,421,668 | 129,150,787 | | 2 to 3 years | 41,812,808 | 34,853,374 | | Over 3 years | 123,484,774 | 102,009,512 | | Subtotal | 2,495,197,718 | 1,560,488,287 | | Less: Provision for Bad Debts of Accounts Receivable | 235,701,561 | 177,857,087 | | Total | 2,259,496,157 | 1,382,631,200 | Changes in Provision for Bad Debts of Accounts Receivable (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Balance at Beginning of Year | 177,857,087 | 164,229,940 | | Provision for the Year | 72,853,044 | 32,215,778 | | Recovered or Reversed During the Year | 10,566,896 | 15,619,947 | | Written Off During the Year | 4,441,674 | 2,968,684 | | Balance at End of Year | 235,701,561 | 177,857,087 | - As of December 31, 2023, individually impaired accounts receivable amounted to RMB 134 million, with a bad debt provision of RMB 110 million, representing an expected credit loss rate of 82%[52] - Among accounts receivable for which bad debt provisions are made based on credit risk characteristics, concrete-related receivables constitute the largest proportion, with an expected credit loss rate of 2% for those aged within 6 months[56] Financing for Accounts Receivable As of December 31, 2023, financing for accounts receivable primarily consisted of bank acceptance bills totaling RMB 746 million, an increase from the previous year Financing for Accounts Receivable (As of December 31, 2023) | Item | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Bank Acceptance Bills | 746,018,692 | 527,248,935 | - As of December 31, 2023, there were no pledged and unmatured bank acceptance bills used for issuing bank acceptance bills (December 31, 2022: RMB 26,413,178)[62] Endorsed and Discounted Bills Not Yet Due (As of December 31, 2023) | Item | Derecognized as of December 31, 2023 (RMB yuan) | Derecognized as of December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Bank Acceptance Bills | 2,036,671,648 | 1,931,042,708 | Accounts Payable As of December 31, 2023, total accounts payable decreased to RMB 7.83 billion, with the majority due within one year and no significant overdue amounts Accounts Payable Aging Analysis (As of December 31, 2023) | Aging | December 31, 2023 (RMB yuan) | December 31, 2022 (RMB yuan) | | :--- | :--- | :--- | | Within 1 year (inclusive) | 6,279,191,709 | 7,234,349,975 | | 1 to 2 years (inclusive) | 747,849,708 | 631,936,804 | | 2 to 3 years (inclusive) | 481,044,971 | 238,643,172 | | Over 3 years | 318,917,850 | 261,353,365 | | Total | 7,827,004,238 | 8,366,283,316 | - Accounts payable are non-interest bearing and typically settled within 30-360 days[64] - As of December 31, 2023, the Group had no significant overdue accounts payable[64] Operating Revenue and Operating Costs In 2023, the company's operating revenue reached RMB 33.76 billion and operating costs RMB 24.74 billion, primarily driven by main business activities, with significant growth in concrete and aggregate sales Operating Revenue and Operating Costs (2023 vs 2022) | Item | 2023 Revenue (RMB yuan) | 2023 Cost (RMB yuan) | 2022 Revenue (RMB yuan) | 2022 Cost (RMB yuan) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 33,460,262,641 | 24,528,047,754 | 30,168,692,817 | 22,332,075,543 | | Other Businesses | 296,824,631 | 213,366,973 | 301,689,546 | 149,826,064 | | Total | 33,757,087,272 | 24,741,414,727 | 30,470,382,363 | 22,481,901,607 | Revenue by Major Product Type (2023 vs 2022) | Major Product Type | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Cement Sales | 18,331,734,881 | 18,829,682,529 | | Concrete Sales | 7,652,223,198 | 5,132,828,829 | | Aggregate Sales | 5,363,828,939 | 3,064,928,809 | | Clinker Sales | 947,002,919 | 1,758,355,585 | | Other | 1,462,297,335 | 1,684,586,611 | | Total | 33,757,087,272 | 30,470,382,363 | Financial Expenses In 2023, financial expenses increased significantly by 52.35% to RMB 699 million, mainly due to higher interest expenses and interest on lease liabilities Composition of Financial Expenses (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Interest Expense | 664,197,382 | 446,819,553 | | Interest Expense on Lease Liabilities | 72,347,746 | 29,299,022 | | Less: Interest Income | 132,479,213 | 84,844,797 | | Less: Amount of Interest Capitalized | 14,477,432 | 69,563,929 | | Exchange Gains and Losses | 89,704,059 | 126,424,800 | | Other | 19,228,256 | 10,353,522 | | Total | 698,520,798 | 458,488,171 | - Borrowing costs capitalized in 2023 amounted to RMB 14,477,432 (2022: RMB 69,563,929) and were included in construction in progress[68] Income Tax Expense In 2023, income tax expense increased to RMB 1.108 billion, influenced by current and deferred tax components, as well as varying tax rates for subsidiaries Income Tax Expense (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Current Income Tax Expense | 1,180,013,990 | 905,849,286 | | Deferred Income Tax Expense | (71,864,955) | 58,681,437 | | Total | 1,108,149,035 | 964,530,723 | Relationship Between Income Tax Expense and Total Profit (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Total Profit | 4,326,247,137 | 3,988,085,596 | | Income Tax Expense Calculated at 25% Tax Rate | 1,081,561,784 | 997,021,399 | | Impact of Different Tax Rates Applicable to Certain Subsidiaries | (166,616,118) | (161,780,637) | | Impact of Unrecognized Deductible Temporary Differences and Deductible Losses | 152,676,943 | 136,768,254 | | Withholding Tax on Expected Distributed Profits from Overseas Subsidiaries | 56,289,852 | - | | Income Tax Expense Calculated at the Group's Actual Tax Rate | 1,108,149,035 | 964,530,723 | Earnings Per Share Basic earnings per share for 2023 was RMB 1.33, and diluted earnings per share was RMB 1.32, both showing an increase from 2022 Earnings Per Share (2023 vs 2022) | Item | 2023 (yuan/share) | 2022 (yuan/share) | | :--- | :--- | :--- | | Basic Earnings Per Share (Continuing Operations) | 1.33 | 1.30 | | Diluted Earnings Per Share (Continuing Operations) | 1.32 | 1.28 | Earnings Per Share Calculation Details (2023 vs 2022) | Item | 2023 (RMB yuan) | 2022 (RMB yuan) | | :--- | :--- | :--- | | Net Profit Attributable to Ordinary Shareholders of the Company for the Current Period | 2,762,116,715 | 2,698,868,510 | | Adjusted Net Profit Attributable to Ordinary Shareholders of the Company for the Current Period | 2,735,421,892 | 2,651,945,423 | | Weighted Average Number of Ordinary Shares Outstanding of the Company | 2,074,039,458 | 2,073,910,517 | | Adjusted Weighted Average Number of Ordinary Shares Outstanding of the Company | 2,074,887,551 | 2,076,299,982 | Publication of Annual Results and Annual Report on HKEX and Company Websites This announcement has been published on the HKEX and Company websites, with the annual report to be dispatched to shareholders and published online in due course - This announcement has been published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.huaxincem.com)[73](index=73&type=chunk) - The Company's annual report for the year ended December 31, 2023, will be dispatched to shareholders who requested printed copies and published on the aforementioned websites in due course[73]