海通国际(00665) - 2023 - 年度财报

Company Profile and Key Financial Indicators This section provides an overview of the company's basic information and presents its key financial performance metrics for the reporting period Company Information Huaxin Cement Co., Ltd. is dual-listed on the Shanghai Stock Exchange (A-shares) and Hong Kong Stock Exchange (H-shares), with Li Yeqing as its legal representative | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | SSE | Huaxin Cement | 600801 | | H-share | HKEX | Huaxin Cement | 06655 | Key Financial Data and Indicators In 2023, the company achieved a 10.79% revenue growth to 33.76 billion yuan and a 2.34% net profit increase to 2.76 billion yuan Near Three-Year Key Accounting Data (Unit: Yuan) | Indicator | 2023 | 2022 | YoY Change (%) | 2021 | | :--- | :--- | :--- | :--- | :--- | | 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 (Excluding Non-recurring Items) | 2,322,113,737 | 2,578,634,452 | -9.95 | 5,304,878,118 | | Net Cash Flow from Operating Activities | 6,235,555,071 | 4,567,694,220 | 36.51 | 7,594,957,122 | | Net Assets Attributable to Shareholders of Listed Company | 28,932,949,847 | 27,446,305,028 | 5.42 | 26,729,911,468 | | Total Assets | 68,800,268,263 | 64,241,676,265 | 7.10 | 52,549,618,050 | Near Three-Year Key Financial Indicators | Key Financial Indicator | 2023 | 2022 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 1.33 | 1.30 | 2.31 | | Diluted Earnings Per Share (Yuan/share) | 1.32 | 1.28 | 3.13 | | Weighted Average Return on Net Assets (%) | 9.82 | 10.03 | Decreased by 0.21 percentage points | 2023 Quarterly Key Financial Data (Unit: Yuan) | Item | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 6,628,435,263 | 9,203,137,237 | 8,333,304,379 | 9,592,210,393 | | Net Profit Attributable to Shareholders of Listed Company | 247,979,284 | 944,581,111 | 681,763,299 | 887,793,021 | | Net Cash Flow from Operating Activities | 331,923,337 | 1,795,243,944 | 1,375,754,217 | 2,732,633,573 | - In 2023, non-recurring gains and losses totaled 440 million yuan, primarily from non-current asset disposal gains (418 million yuan) and government subsidies (130 million yuan)[18] Company Business Overview This section details the company's industry position, main business segments, operating model, and core competitive advantages Industry Overview and Company Position In 2023, China's cement industry faced challenges from real estate adjustments and declining demand, with company clinker capacity ranking fourth nationally - In 2023, China's cement industry experienced a decline in total demand, with annual cement output reaching 2.023 billion tons, a 5% year-on-year decrease, leading to the lowest industry profit in nearly sixteen years[21] - Severe overcapacity is a major issue in the current cement industry, with the estimated clinker capacity utilization rate for 2023 at 59%, a 7 percentage point decrease from 2022[21] - As of the end of 2023, the company's total clinker capacity ranked fourth nationally, with domestic clinker capacity ranking sixth and overseas clinker capacity ranking second[22] Main Business and Operating Model The company has evolved into a global building materials group with a full industry chain, including cement, concrete, and aggregates, with cement business contributing 57% of revenue - The company's business has expanded to include cement, concrete, aggregates, environmental protection, equipment manufacturing and engineering, and new building materials, becoming a global building materials group with integrated full industry chain development[23] Key Capacities as of End of 2023 | Business Segment | Capacity | | :--- | :--- | | Cement | 127 million tons/year | | Ready-mix Concrete | 122 million cubic meters/year | | Aggregates | 277 million tons/year | | Waste Disposal | 16.32 million tons/year | - At the end of 2023, cement business revenue accounted for 57% of the company's total operating revenue, maintaining its dominant position, while non-cement businesses have become significant profit contributors[23] Core Competencies The company's core competencies include scale, green development, technological innovation, brand strength, and strategic global layout - The company has a presence in 14 provinces and cities domestically and 11 countries overseas, boasting 127 million tons of cement capacity, making it one of the few industry players with a complete and vertically integrated industrial chain[26] - The company demonstrates significant advantages in green and low-carbon development; as of the end of 2023, the thermal substitution rate for domestic kiln lines using alternative fuels reached 23%, with 63% of kiln lines achieving benchmark comprehensive energy consumption levels[27] - The company has achieved breakthroughs in ultra-high performance concrete (UHPC) products, successfully developing the Super Klong® series and achieving commercial application in four major engineering fields[28] - The company's brand value continues to increase, reaching 87.856 billion yuan in 2023, ranking 79th on the "China's 500 Most Valuable Brands" list, and has been listed on "Fortune China 500" for 14 consecutive years[29] Board of Directors' Report This section covers the company's investment activities, profit distribution, key customer and supplier relationships, and research and development expenditures Investment Status Long-term equity investments increased by 16.86% to 513 million yuan, with major subsidiaries achieving significant net profits Operating Performance of Major Holding Subsidiaries (Unit: Yuan) | Company Name | Total Assets | Net Assets | Net Profit | Operating Revenue | | :--- | :--- | :--- | :--- | :--- | | Huaxin Cement (Wuxue) Co., Ltd. | 2,818,741,684 | 1,966,011,264 | 464,960,252 | 2,415,036,770 | | Huaxin Green Building Materials (Wuxue) Co., Ltd. | 1,426,862,899 | 845,421,805 | 312,238,245 | 1,080,618,963 | | Huaxin Cement Jizzakh LLC | 680,611,904 | 628,475,459 | 229,784,396 | 682,228,912 | Profit Distribution The company distributed a cash dividend of 0.51 yuan per share for 2022 and proposes 0.53 yuan per share for 2023 - The 2022 profit distribution plan was completed on July 21, 2023, with a cash dividend of 0.51 yuan per share (tax inclusive)[39] - The Board of Directors proposes a 2023 profit distribution plan of a cash dividend of 0.53 yuan per share (tax inclusive) to all shareholders based on the total share capital at the end of 2023[40][41] Major Customers and Suppliers The company maintains low customer and supplier concentration, with the top five customers accounting for 3.8% of sales and top five suppliers for 12.2% of purchases - Sales to the top five customers totaled 1.284 billion yuan, accounting for 3.8% of the annual sales, with the largest customer's sales accounting for 1.9%[44][45] - Purchases from the top five suppliers totaled 2.588 billion yuan, accounting for 12.2% of the annual procurement, with the largest supplier's purchases accounting for 6.5%[46][47] R&D Investment In 2023, total R&D investment was 325 million yuan, representing 0.96% of operating revenue, with 7.3% capitalized 2023 R&D Investment (Unit: Yuan) | Item | Amount | | :--- | :--- | | Expensed R&D Investment for the Period | 301,098,955 | | Capitalized R&D Investment for the Period | 23,795,650 | | Total R&D Investment | 324,894,605 | | Total R&D Investment as % of Operating Revenue | 0.96 | | Capitalized R&D Investment as % | 7.3 | Management Discussion and Analysis This section provides an overview of the company's operational performance, key financial analysis, 2024 outlook, and risk management strategies Overview of Business Development In 2023, the company achieved resilient growth by advancing its four key strategies, expanding aggregates and concrete businesses, and acquiring overseas assets - Annual cement cost decreased by 10.29%, with domestic cement cost decreasing by 12.79% year-on-year[56] - Aggregates business added 67 million tons of new capacity, reaching an annual capacity of 277 million tons, with third-party sales of 131 million tons, a 100% year-on-year increase[56] - Concrete business sales reached 27.27 million cubic meters, a 66% year-on-year increase[56] - Successfully completed the acquisitions of Oman Cement and South Africa's Natal Portland Cement, bringing overseas effective cement grinding capacity to 20.91 million tons/year[56] Analysis of Key Operating Performance Operating revenue grew 10.79% in 2023, driven by strong concrete and aggregates sales, while overseas revenue increased by nearly 30% Main Business by Product (Unit: Yuan) | Product | Operating Revenue | Operating Cost | Gross Margin (%) | YoY Change in Operating Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Cement | 18,331,734,881 | 13,425,727,572 | 26.76 | -2.64 | | Concrete | 7,652,223,198 | 6,467,900,216 | 15.48 | 49.08 | | Aggregates | 5,363,828,939 | 2,902,999,002 | 45.88 | 75.01 | | Clinker | 947,002,919 | 843,819,065 | 10.90 | -46.14 | | Total | 33,757,087,272 | 24,741,414,727 | 26.71 | 10.79 | Key Product Production and Sales Volume | Main Product | Unit | Production Volume | Sales Volume | YoY Change in Sales Volume (%) | | :--- | :--- | :--- | :--- | :--- | | Cement | 10,000 tons | 6,526 | 5,818 | 6.38 | | Clinker | 10,000 tons | 5,243 | 372 | -34.85 | | Aggregates | 10,000 tons | 17,779 | 13,137 | 99.69 | | Concrete | 10,000 cubic meters | 2,727 | 2,727 | 66.39 | - By region, overseas revenue grew by 29.99%, with revenue in East China, Central China, South China, and Southwest China all increasing, primarily due to significant growth in concrete and aggregates sales[60][62] - Financial expenses increased by 52.35% year-on-year, mainly due to increased interest payments[64] - As of the end of the reporting period, the company's asset-liability ratio was 51.60%, a 0.39 percentage point decrease from the end of the previous year[71] 2024 Outlook and Strategy The company anticipates continued challenges in domestic demand for 2024 and will advance its four core strategies, targeting 37.1 billion yuan in total revenue - Domestic demand for cement, aggregates, and concrete is expected to remain subdued in 2024, while global cement demand (excluding China) is projected to increase by 2.4% year-on-year, driven by markets in India, the Middle East, and Africa[74][76] 2024 Operating Plan | Item | Target | | :--- | :--- | | Cement and Clinker Sales | Approx. 63 million tons | | Aggregates Sales | 156 million tons | | Concrete Sales | 30.52 million cubic meters | | Total Revenue Forecast | 37.1 billion yuan | | Capital Expenditure | Approx. 6.9 billion yuan | - The company will continue to advance its "integrated transformation, overseas development, new materials business expansion, and traditional industry + digital innovation" strategies, accelerating its green, intelligent, and international transformation[77] Risk Analysis and Response The company faces risks from declining domestic demand, overcapacity, environmental compliance, and international operations, addressed through supply-side reform and technological innovation - Major risks include: declining domestic demand and overcapacity, safety and environmental compliance (especially ultra-low emission policies), rising production costs due to energy market uncertainties and increased technological transformation investments, and geopolitical and financial market volatility in international operations[81] - Response measures include: promoting supply-side reform, increasing investment in safety and environmental protection, cost reduction through technological transformation and digital innovation, strengthening refined marketing, and implementing risk hedging strategies[82] Significant Matters This section highlights key events and transactions during the reporting period, including guarantees and major corporate actions Guarantees At the end of the reporting period, external guarantees totaled 10.02 billion yuan, all for subsidiaries, representing 30.08% of net assets Summary of Guarantees (Unit: Yuan) | Item | Amount | | :--- | :--- | | Total Guarantees for Subsidiaries at End of Reporting Period | 10,016,014,939 | | Total Guarantees as % of Company's Net Assets | 30.08 | | Debt Guarantees Provided for Guaranteed Parties with Asset-Liability Ratio Exceeding 70% | 7,297,637,010 | Major Impact Events The company completed several significant events, including bond issuance, share repurchases, employee stock plans, and two major overseas acquisitions - The company was approved to issue corporate bonds not exceeding 3 billion yuan, with the first tranche of 800 million yuan completed on December 5, 2023, at a coupon rate of 3.12%[101] - Completed the acquisition of 64.66% equity in Oman Cement Company SAOG for a total consideration of 210.8 million USD[104] - Completed the acquisition of 100% equity in Natal Portland Cement Company (Pty) Ltd. for a total consideration of 231.6 million USD[105] Share Changes and Shareholder Information This section details the company's shareholding structure, including major shareholders and the ultimate controlling party Shareholder Information As of December 31, 2023, the company had 54,007 shareholders, with Holcim Limited as the ultimate controlling shareholder holding 41.81% of shares Top Three Shareholders as of December 31, 2023 | Shareholder Name | Number of Shares Held | Percentage (%) | Share Type | | :--- | :--- | :--- | :--- | | HKSCC Nominees Limited | 734,719,919 | 35.34 | H-share | | HOLCHIN B.V. | 451,333,201 | 21.71 | A-share | | Huaxin Group Co., Ltd. | 338,060,739 | 16.26 | A-share | - The company's controlling shareholder and ultimate actual controller is Holcim Limited, which indirectly holds a total of 41.81% of the company's shares through its wholly-owned subsidiaries Holderfin B.V. and Holchin B.V.[110][113] Directors, Supervisors, Senior Management, and Employees This section provides details on the company's board, supervisory board, senior management, and overall employee structure, including compensation and equity incentive plans Basic Information and Shareholding of Directors, Supervisors, and Senior Management The report details the tenure, shareholdings, and annual remuneration of the company's directors, supervisors, and senior management, with many increasing their holdings - During the reporting period, several directors, supervisors, and senior management increased their shareholdings through secondary market purchases, including Director and President Li Yeqing, who acquired 185,900 shares[117] Employee Information As of the end of 2023, the group had 20,804 employees, with production and technical personnel forming the largest groups, and approximately 47% holding college degrees or higher Employee Professional Composition | Professional Category | Number of People | | :--- | :--- | | Production Personnel | 7,735 | | Sales Personnel | 1,367 | | Technical Personnel | 7,743 | | Financial Personnel | 868 | | Administrative Personnel | 3,091 | | Total | 20,804 | Employee Education Level | Education Level Category | Number of People | | :--- | :--- | | Master's Degree and Above | 585 | | Bachelor's Degree | 3,920 | | Associate Degree | 5,508 | | Other | 10,791 | | Total | 20,804 | Equity Incentive Plan The company settled its 2020-2022 employee stock ownership plan, repurchasing and canceling some shares, and launched a new 2023-2025 plan, purchasing 2.92 million A-shares for its first phase - The 2020–2022 core employee stock ownership plan resulted in the repurchase and cancellation of some shares due to unmet performance targets, with the first lock-up period expiring on October 28, 2023[139][140] - The company launched the 2023–2025 core employee stock ownership plan, with the first phase completing the purchase of 2,917,577 A-shares on September 27, 2023[144][145] Corporate Governance Report This section outlines the company's corporate governance structure, specialized board committees, and internal control and risk management systems Overview of Corporate Governance The company maintains a robust corporate governance structure compliant with dual-listing regulations, ensuring independence and equitable shareholder rights - The company's corporate governance structure complies with the "Company Law," "Guidelines for Corporate Governance of Listed Companies," and the HKEX "Corporate Governance Code," with adherence to code provisions during the reporting period[148][149] - The company maintains strict "five separations" from its controlling shareholder in terms of personnel, assets, finance, organization, and business, ensuring independent operation[148] Board Committees The Board of Directors has five specialized committees—Audit, Nomination, Remuneration and Appraisal, Strategy, and Governance and Compliance—all actively fulfilling their responsibilities - The Board of Directors has five specialized committees: Audit Committee, Nomination Committee, Remuneration and Appraisal Committee, Strategy Committee, and Governance and Compliance Committee[165] - During the reporting period, the Audit Committee held 4 meetings, the Nomination Committee 1, the Remuneration and Appraisal Committee 3, the Strategy Committee 2, and the Governance and Compliance Committee 2, with all committee members personally attending[169][171][172][173][174][175] Internal Control and Risk Management The company maintains a risk-oriented internal control system with a "three lines of defense" mechanism, confirmed effective by the Board and external auditors - The company's Board of Directors is responsible for establishing and effectively implementing the internal control system, and has built a "three lines of defense" risk management mechanism involving business departments, internal audit, and external audit[180][181] - Ernst & Young Hua Ming audited the effectiveness of the company's internal controls related to financial reporting and issued a standard unqualified audit opinion[182][185] - The Board of Directors has assessed and confirmed that the company's internal control system was effective and sufficient during the reporting period[182] Corporate Bonds Information This section provides an overview of the company's outstanding domestic and overseas corporate bonds, including credit ratings and fund utilization Overview of Corporate Bonds The company has multiple outstanding domestic and overseas bonds, with Moody's Baa1 rating for overseas bonds and AAA for domestic bonds, all funds used as committed Credit Ratings of Major Outstanding Bonds | Bond Name | Credit Rating Agency | Credit Rating Level | Rating Outlook | | :--- | :--- | :--- | :--- | | Overseas Bonds Issued in 2020 | MOODY'S INVESTORS SERVICE | Baa1 | Negative | | Domestically Publicly Issued Bonds | China Chengxin International Credit Rating Co., Ltd. | AAA | Stable | - All bond proceeds were used consistently with the committed purposes and plans in the offering circulars, primarily for overseas M&A projects and Belt and Road investment projects[192][193] Debt Repayment Capacity Indicators for the Past Two Years | Key Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Asset-Liability Ratio (%) | 51.6% | 52.0% | | EBITDA to Total Debt | 0.12 | 0.11 | | Interest Coverage Ratio | 7.51 | 9.93 | | Loan Repayment Rate (%) | 100% | 100% | | Interest Payment Rate (%) | 100% | 100% | Five-Year Financial Summary This section presents a five-year overview of the company's financial performance, highlighting trends in revenue, profit, and asset growth Five-Year Financial Summary Over the past five years, operating revenue fluctuated, while total profit and net profit attributable to the parent company significantly declined after 2021, despite continuous asset expansion Five-Year Financial Summary (Unit: Million RMB) | Item | 2023 | 2022 | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 33,757 | 30,470 | 32,464 | 29,357 | 31,439 | | Total Profit | 4,326 | 3,988 | 7,373 | 7,664 | 8,716 | | Net Profit Attributable to Parent Company Owners | 2,762 | 2,699 | 5,364 | 5,631 | 6,342 | | Total Assets | 68,800 | 64,242 | 52,550 | 43,929 | 36,646 | | Total Liabilities | 35,505 | 33,403 | 23,172 | 18,189 | 13,278 | Independent Auditor's Report This section presents the independent auditor's opinion on the financial statements and highlights key audit matters Audit Opinion and Key Audit Matters Ernst & Young Hua Ming issued an unqualified audit opinion on the 2023 financial statements, with "Expected Credit Losses on Accounts Receivable" identified as a key audit matter - Auditor Ernst & Young Hua Ming issued a standard unqualified audit opinion, stating that the financial statements fairly present the company's financial position as of December 31, 2023, and its operating results and cash flows for 2023[199] - The key audit matter is "Expected Credit Losses on Accounts Receivable." As of the end of 2023, the carrying amount of accounts receivable in the consolidated financial statements was 2.26 billion yuan, with 236 million yuan provided for impairment. The auditor performed procedures including internal control testing, model review, and sample review[201][202] Financial Statements This section presents the company's consolidated balance sheet, income statement, and cash flow statement for the reporting period Consolidated Balance Sheet As of year-end 2023, total assets reached 68.80 billion yuan, a 7.10% increase, with total liabilities at 35.51 billion yuan, resulting in a 51.6% asset-liability ratio Consolidated Balance Sheet Summary (Unit: Yuan) | Item | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | 15,219,588,022 | 14,450,298,165 | | Total Non-current Assets | 53,580,680,241 | 49,791,378,100 | | Total Assets | 68,800,268,263 | 64,241,676,265 | | Total Current Liabilities | 18,934,215,066 | 16,624,884,300 | | Total Non-current Liabilities | 16,571,170,755 | 16,778,611,504 | | Total Liabilities | 35,505,385,821 | 33,403,495,804 | | Total Equity Attributable to Parent Company Shareholders | 28,932,949,847 | 27,446,305,028 | | Total Shareholders' Equity | 33,294,882,442 | 30,838,180,461 | Consolidated Income Statement In 2023, operating revenue increased by 10.79% to 33.76 billion yuan, with net profit attributable to parent company shareholders rising 2.34% to 2.76 billion yuan Consolidated Income Statement Summary (Unit: Yuan) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Operating Revenue | 33,757,087,272 | 30,470,382,363 | | Operating Cost | 24,741,414,727 | 22,481,901,607 | | Operating Profit | 4,351,500,618 | 4,022,570,540 | | Total Profit | 4,326,247,137 | 3,988,085,596 | | 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 | | Basic Earnings Per Share | 1.33 | 1.30 | Consolidated Cash Flow Statement Net cash flow from operating activities increased by 36.51% to 6.24 billion yuan in 2023, while investment and financing activities resulted in net outflows Consolidated Cash Flow Statement Summary (Unit: Yuan) | Item | 2023 | 2022 | | :--- | :--- | :--- | | 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 | | Net Increase in Cash and Cash Equivalents | (1,245,905,793) | (1,934,453,363) | | Cash and Cash Equivalents at Year-End | 5,370,115,985 | 6,616,021,778 |