中国天瑞水泥(01252) - 2021 - 中期财报

Company Information Company Overview The company overview details China Tianrui Group Cement's foundational information, including its Cayman Islands registration, Hong Kong listing (01252), and key governance structures - The company's Chairman and Non-executive Director is Mr. Li Liufa, with Executive Directors including Ms. Li Fengluan, Mr. Ding Jifeng, Mr. Xu Wuxue, and Mr. Li Jiangming[15] - The company's auditor is Deloitte Touche Tohmatsu[16] Financial and Operational Highlights Financial Highlights H1 2021 revenue grew 9.1%, profit attributable to owners increased 4.5%, total liabilities decreased 9.3%, and total equity rose 5.4% Key Financial Data for H1 2021 | Metric | H1 2021 (RMB thousands) | H1 2020 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 5,732,761 | 5,253,673 | +9.1% | | Gross Profit | 1,753,881 | 1,735,625 | +1.1% | | Profit Attributable to Owners | 751,571 | 718,959 | +4.5% | | Basic EPS (RMB) | 0.26 | 0.24 | +4.5% | | Metric | As of June 30, 2021 (RMB thousands) | As of Dec 31, 2020 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 31,604,499 | 32,439,501 | -2.6% | | Total Liabilities | 15,986,591 | 17,616,603 | -9.3% | | Total Equity | 15,617,908 | 14,822,898 | +5.4% | Business Review H1 2021 saw strong overall performance, with cement sales volume up 10.6% and limestone aggregate volume and price significantly increasing - As of June 30, 2021, the Group's production capacity included 28.4 million tons of clinker, 56.4 million tons of cement, and 19.2 million tons of limestone aggregate[20] Key Product Sales Volume and Price Changes (H1 2021 vs H1 2020) | Product | Sales Volume | YoY Change | Average Price (RMB/ton) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Cement | 17.5 million tons | +10.6% | 290.4 | -2.9% | | Limestone Aggregate | 8.6 million tons | +15.9% | 53.1 | +14.8% | | Clinker | 0.7 million tons | Flat | - | - | Management Discussion and Analysis Macroeconomic and Industry Environment H1 2021 saw infrastructure investment growth supporting regional cement demand, though industry profitability declined later due to rising costs and demand drop - National infrastructure investment grew by 7.8% year-on-year, with Henan and Liaoning provinces, key regions for the Group, exceeding this at 9.6% and 16.5% respectively[21] - National cement production increased by 14% year-on-year in H1, though May and June saw negative monthly growth, leading to significant industry profit decline due to price drops and rising raw material costs[23] Financial Review The Group's H1 financial performance saw revenue growth and increased profit attributable to owners, despite a decline in gross margin due to rising costs Revenue by Product and Region (RMB millions) | Item | H1 2021 (RMB millions) | H1 2020 (RMB millions) | Increase | | :--- | :--- | :--- | :--- | | By Product | | | | | Cement Sales | 5,086.1 | 4,736.7 | +7.4% | | Limestone Aggregate | 454.7 | 341.6 | +33.1% | | Clinker Sales | 192.0 | 175.4 | +9.5% | | By Region | | | | | Central China | 4,408.6 | 4,082.5 | +8.0% | | Northeast China | 1,324.2 | 1,171.2 | +13.1% | - Cost of sales increased by 13.1% to RMB 3.98 billion, mainly due to rising raw coal prices, with coal costs rising from 29.6% to 35.4% of total sales cost[25] - Gross profit margin decreased from 33.0% to 30.6%, primarily due to lower cement prices[25] - Administrative expenses significantly increased by 55.4% to RMB 425 million, driven by R&D and "Green Mine" project investments[28] - Finance costs decreased by 10.6% to RMB 506 million, primarily due to a gradual reduction in borrowings and bonds[29] - Income tax expense decreased by 19.8% to RMB 193 million, mainly due to preferential tax rates for high-tech subsidiaries and lower pre-tax profit[29] Financial Position and Liquidity The Group's H1 2021 financial position significantly improved, with total borrowings decreasing by RMB 1.59 billion and net gearing ratio dropping to 14.1% - The Group's total borrowings and bonds decreased by approximately RMB 1.59 billion, from RMB 11.22 billion to RMB 9.63 billion[35] Changes in Key Financial Ratios | Ratio | June 30, 2021 | Dec 31, 2020 | Trend | | :--- | :--- | :--- | :--- | | Net Gearing Ratio | 14.1% | 35.9% | Significant Decrease | | Debt-to-Asset Ratio | 50.6% | 54.3% | Decrease | | Current Ratio | 1.4 | 1.2 | Increase | | Quick Ratio | 1.3 | 1.1 | Increase | | Equity Ratio | 1.0 | 1.2 | Decrease | - H1 capital expenditure was approximately RMB 136 million, a significant decrease from RMB 333 million in the prior year period[38] - As of June 30, 2021, assets with a book value of approximately RMB 4.08 billion were pledged to secure bank borrowings[38] Business Outlook H2 2021 outlook anticipates increased infrastructure investment stimulating cement demand, supported by new capacity policies, with the Group focusing on regional advantages and cost control - Government is expected to increase infrastructure investment in major water conservancy, urban drainage, and transportation projects, supporting and stimulating cement demand[44] - MIIT's new capacity replacement policy, with increased replacement ratios, is expected to further reduce future capacity, addressing overcapacity and supporting dual carbon goals[44] - Group strategy focuses on leveraging regional advantages in Central and Northeast China, seizing post-disaster reconstruction opportunities, exploring coastal markets, and enhancing cost efficiency across operations[45] Disclosure of Interests Directors' and Major Shareholders' Interests As of June 30, 2021, Chairman Mr. Li Liufa and spouse jointly held approximately 69.58% of the company's shares, with other major shareholder interests also disclosed Shareholding of Directors and Major Shareholders (as of June 30, 2021) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Shareholding Percentage | | :--- | :--- | :--- | :--- | | Mr. Li Liufa | Interest in controlled corporation/Long position | 2,044,484,822 | 69.58% | | Ms. Li Fengluan | Interest in controlled corporation/Long position | 2,044,484,822 | 69.58% | | Yukuo Limited | Beneficial owner/Long position | 2,044,484,822 | 69.58% | | Export-Import Bank of China | Interest in security/Long position | 315,000,000 | 10.72% | | China Huarong Asset Management | Interest in controlled corporation/Long position | 470,000,000 | 16.00% | - Controlling shareholder Yukuo Limited pledged 580 million shares (approximately 19.74% of total share capital) to secure loans[54] Other Interests Disclosure No share options were granted; Chairman Li Liufa's approved competing business interests were disclosed, alongside details of loans secured by controlling shareholder share pledges - The company adopted a share option scheme in 2011, but no share options have been granted since its adoption and up to the end of the reporting period[55][56] - Controlling shareholder Yukuo pledged company shares to secure two loans for the Group, with loan agreements stipulating a minimum shareholding percentage, a breach of which constitutes default[56][57] Corporate Governance Governance Practices The company maintained high corporate governance standards, complying with the Listing Rules' Code, with the CEO position vacant since 2015, and no interim dividend declared - The company complied with the Corporate Governance Code, with the Chief Executive Officer position vacant since December 1, 2015, and daily operations managed by the Executive Committee[59] - The Board does not recommend the payment of a 2021 interim dividend[61] - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[61] Condensed Consolidated Financial Statements Key Financial Statements H1 2021 saw RMB 988 million profit before tax, RMB 31.6 billion total assets, and RMB 2.52 billion net cash from operations, with period-end cash slightly decreased Condensed Consolidated Statement of Comprehensive Income Summary (for the six months ended June 30, RMB thousands) | Item | 2021 (Unaudited, RMB thousands) | 2020 (Unaudited, RMB thousands) | | :--- | :--- | :--- | | Revenue | 5,732,761 | 5,253,673 | | Gross Profit | 1,753,881 | 1,735,625 | | Profit Before Tax | 987,825 | 1,012,522 | | Total Profit and Comprehensive Income for the Period | 795,010 | 772,239 | | Profit Attributable to Owners of the Company | 751,571 | 718,959 | Condensed Consolidated Statement of Financial Position Summary (RMB thousands) | Item | June 30, 2021 (Unaudited, RMB thousands) | Dec 31, 2020 (Audited, RMB thousands) | | :--- | :--- | :--- | | Total Assets | 31,604,499 | 32,439,501 | | Total Liabilities | 15,986,591 | 17,616,603 | | Total Equity | 15,617,908 | 14,822,898 | Condensed Consolidated Cash Flow Statement Summary (for the six months ended June 30, RMB thousands) | Item | 2021 (Unaudited, RMB thousands) | 2020 (Unaudited, RMB thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 2,518,152 | 1,770,567 | | Net Cash (Used in) from Investing Activities | (1,647,754) | 292,427 | | Net Cash Used in Financing Activities | (1,003,955) | (1,936,424) | | Cash and Cash Equivalents at Period End | 2,278,558 | 1,955,403 | Notes to the Financial Statements Notes provide detailed financial statement information, including revenue sources, segment performance, and comprehensive details on various borrowings and pledged assets Segment Results (for the six months ended June 30, RMB thousands) | Segment | 2021 Revenue (RMB thousands) | 2021 Profit (RMB thousands) | 2020 Revenue (RMB thousands) | 2020 Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Central China | 4,408,573 | 841,638 | 4,082,481 | 932,743 | | Northeast China | 1,324,188 | 157,786 | 1,171,192 | 88,319 | | Total | 5,732,761 | 999,424 | 5,253,673 | 1,021,062 | - As of June 30, 2021, trade receivables aged within 90 days constituted the largest portion, approximately RMB 510 million[88] - In 2019, the Group issued USD 140 million in secured notes with a 12% annual interest rate, maturing in 2022[99] - As of June 30, 2021, the Group pledged assets with a book value of approximately RMB 4.08 billion to secure bank borrowings, including property, plant and equipment, right-of-use assets, mining rights, and bank balances[105] - The Group provided financial guarantees to related parties with an actual utilized amount of approximately RMB 1.23 billion[108]