华新水泥(06655) - 2024 - 中期财报

Definitions Provides definitions of key terms used throughout the report Company Information Presents fundamental details about the company's registration and contact information Management Discussion and Analysis Analyzes the company's operational performance, financial condition, and future outlook Industry Trends and Main Business In H1 2024, the domestic cement industry faced severe challenges from declining real estate investment, with national cement output hitting a new low since H1 2011; despite this, Huaxin Cement diversified into concrete, aggregates, and environmental services across 17 domestic provinces and 16 overseas countries, with non-cement businesses becoming significant profit contributors even as cement still dominated revenue at 53% H1 2024 Macroeconomic and Industry Data | Indicator | Value | YoY Change | | :--- | :--- | :--- | | Gross Domestic Product (GDP) | - | +5.0% | | National Fixed Asset Investment | 24.54 trillion yuan | +3.9% | | Infrastructure Investment | - | +5.4% | | Real Estate Development Investment | - | -10.1% | | National Cumulative Cement Output | 8.5 million tons | -10.76% | - The company has evolved into a global, integrated building materials group with a full industry chain, encompassing cement, concrete, aggregates, environmental protection, equipment manufacturing and engineering, and new building materials[11] Company's Main Production Capacity as of June 30, 2024 | Business Segment | Annual Capacity/Processing Capacity | | :--- | :--- | | Cement Capacity | 127 million tons | | Commercial Concrete | 52,184 cubic meters/hour | | Aggregates | 280 million tons | | Waste Disposal | 16.87 million tons | - As of the end of the reporting period, cement business revenue accounted for 53% of the company's total operating revenue, remaining dominant, but non-cement businesses have become significant profit contributors[11] Analysis of Core Competencies The company maintained strong comprehensive competitiveness by continuously strengthening its core advantages in scale, industrial chain integration, green development, technological innovation, brand, product quality, strategic layout, intelligent management, and management team - The company continuously strengthened and enhanced eight core competitive advantages: scale and industrial chain, green and low-carbon development, technological innovation, brand, product quality, strategic layout, intelligent management, and management team[12] Overview of Operating Performance In H1 2024, despite domestic cement market challenges, the company achieved 2.56% revenue growth to 16.237 billion yuan driven by strong overseas, aggregates, and concrete businesses, effectively offsetting a 38.74% decline in net profit due to domestic cement price and volume drops H1 2024 Key Performance Indicators | Indicator | Amount (RMB) | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 16.237 billion yuan | +2.56% | | Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) | 3.698 billion yuan | -1.88% | | Net Profit Attributable to Parent Company | 731 million yuan | -38.74% | H1 2024 Major Product Sales Volume | Product | Sales Volume | YoY Change | | :--- | :--- | :--- | | Cement and Commercial Clinker (Total) | 28.4844 million tons | -4.9% | | - Of which: Overseas Cement and Clinker | 7.5976 million tons | +47.0% | | Aggregates | 71.5261 million tons | +41.60% | | Concrete | 14.7005 million cubic meters | +34.25% | H1 2024 Operating Revenue by Business Segment | Business Segment | Revenue (RMB) | YoY Change | | :--- | :--- | :--- | | Cement Business (Total) | 8.666 billion yuan | -11.25% | | - Of which: Domestic Cement | 5.106 billion yuan | -31.57% | | - Of which: Overseas Cement | 3.578 billion yuan | +55.41% | | Aggregates Business | 2.962 billion yuan | +36.96% | | Concrete Business | 3.943 billion yuan | +24.21% | - The company continued to advance its overseas business development, with new construction or upgrade projects in Mozambique, Malawi, Zambia, South Africa, and Zimbabwe, expected to add approximately 3 million tons/year of clinker capacity and 2.7 million tons/year of cement grinding capacity[14] - The company adhered to green and low-carbon development, cumulatively using 2.2 million tons of alternative fuels in the first half, achieving a thermal substitution rate of 21.5% and reducing carbon dioxide emissions by 1.2 million tons[14] Analysis of Key Operating Performance During the reporting period, the company's financial expenses increased significantly due to exchange losses, while net cash outflow from investing activities improved due to reduced M&A and construction expenditures, and accounts receivable grew with concrete business expansion Analysis of Income Statement and Cash Flow Statement During the reporting period, financial expenses significantly increased by 63.09% due to higher exchange losses, while net cash outflow from investing activities narrowed by 46.95% due to reduced M&A and construction expenditures, and financing cash outflow also narrowed by 47.27% from decreased debt repayments Changes in Key Items of Income Statement and Cash Flow Statement | Item | Current Period (RMB) | Prior Period (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 16,237,373,654 | 15,831,572,500 | 2.56 | | Financial Expenses | 399,954,782 | 245,237,036 | 63.09 | | Net Cash Flow from Operating Activities | 1,730,584,063 | 2,127,167,281 | -18.64 | | Net Cash Flow from Investing Activities | -1,178,576,055 | -2,221,519,537 | 46.95 | | Net Cash Flow from Financing Activities | -1,083,480,073 | -2,054,800,997 | 47.27 | - The change in financial expenses was primarily due to increased exchange losses[15] - The change in net cash flow from investing activities was primarily due to reduced expenditures on corporate acquisitions and construction projects[16] Assets and Liabilities As of the reporting period end, accounts receivable increased by 40.97% due to expanded concrete business, while employee compensation and taxes payable decreased, and long-term payables surged by 178.38% due to increased mining rights transfer fees Changes in Key Items of Balance Sheet | Item | Current Period End (yuan) | Change from Prior Year End (%) | Reason for Change | | :--- | :--- | :--- | :--- | | Accounts Receivable | 3,185,256,332 | 40.97 | Expanded concrete business | | Employee Compensation Payable | 139,927,592 | -55.21 | Payment of prior year performance bonuses | | Taxes Payable | 409,223,155 | -42.04 | Lower profitability, reduced income tax payable | | Other Payables | 1,421,829,979 | 41.54 | H-share dividends to be paid after distribution | | Long-term Payables | 920,951,115 | 178.38 | Increased mining rights transfer fees | Other Financial Notes As of the reporting period end, the group's capital structure, liquidity, and financial resources remained stable, with the asset-liability ratio slightly increasing to 52.2%, and capital expenditures of approximately 1.44 billion yuan primarily for overseas expansion and energy-saving upgrades - The group's asset-liability ratio increased from 51.6% at the beginning of the year to 52.2% at the end of the reporting period[19] Bank Loan Maturity Analysis (as of June 30, 2024) | Maturity | Amount (RMB) | | :--- | :--- | | Within 1 year | 3,592,702,902 | | 1 to 2 years | 3,256,340,280 | | 2 to 5 years | 4,663,064,870 | | Over 5 years | 670,752,151 | | Total | 12,182,860,203 | - Capital expenditures in H1 2024 were approximately 1.44 billion yuan, primarily for overseas production line construction and energy-saving upgrades[23] Outlook for H2 2024 For H2 2024, the company anticipates seasonal recovery in cement demand driven by infrastructure policies but expects overall annual demand decline and overcapacity to persist, thus implementing four new strategies to stabilize domestic performance and expand overseas - In H2, with the issuance of ultra-long-term special treasury bonds and the advancement of the 'Three Major Projects,' infrastructure investment is expected to maintain growth, and cement demand may see a seasonal rebound, though the full-year demand trend is still projected to decline[25] - The company set its long-term strategic goal to become a global leading multinational building materials enterprise and will implement four new strategies: - Overseas multi-business development strategy - Domestic integrated synergy strategy - Carbon reduction and value-added innovation strategy - Digital AI-driven strategy[25] Significant Matters Details major corporate events, including guarantees, litigation, and share-related activities Significant Guarantees and Other Matters During the reporting period, the company had no significant related-party transactions or new major litigation, with outstanding guarantees to subsidiaries totaling 10.534 billion yuan, representing 31.94% of net assets - As of the end of the reporting period, the company's total guarantee balance to its subsidiaries was 10,533,738,439 yuan, accounting for 31.94% of the company's net assets[27] - During the reporting period, the company had no new significant litigation or arbitration matters, nor did it repurchase, sell, or redeem any of its listed securities[27] Share Changes and Shareholder Information Outlines changes in share capital and provides an overview of the company's shareholder structure Shareholder Information As of June 30, 2024, the company's share capital structure remained unchanged with 42,076 shareholders, and Holcim Ltd, through its controlled entities, held a total of 41.81% equity interest - As of June 30, 2024, the company had a total of 42,076 shareholders, including 42,067 A-share shareholders and 9 H-share shareholders[28] Top Ten Shareholders' Holdings (as of June 30, 2024) | Shareholder Name | Share Class | Number of Shares Held | Percentage (%) | | :--- | :--- | :--- | :--- | | Hong Kong Securities Clearing Company Nominees Limited | H-share | 734,719,919 | 35.34 | | HOLCHIN B.V. | A-share | 451,333,201 | 21.71 | | Huaxin Cement Group Co., Ltd. | A-share | 338,060,739 | 16.26 | | Hong Kong Securities Clearing Company Limited | A-share | 29,245,175 | 1.41 | - To the best knowledge of the Directors, major shareholder Holcim Ltd, through its controlled entities, collectively held 869,235,668 A-shares and H-shares, accounting for 41.81% of the total share capital[31] Directors, Supervisors, and Senior Management Provides information on the company's governance structure, including personnel changes and employee details Changes in Directors, Supervisors, and Senior Management On May 21, 2024, the company completed the re-election of its Board of Directors and Supervisory Committee, with Mr. Xu Yongmo elected as Chairman and Mr. Li Yeqing appointed as President, while some Vice Presidents and Supervisors ceased their roles due to the re-election - On May 21, 2024, the company completed the re-election of its Board of Directors and Supervisory Committee, with Mr. Xu Yongmo elected as the new Chairman of the Board and Mr. Li Yeqing appointed as the company's President[35] Employee Information As of June 30, 2024, the group employed 20,576 staff globally, implementing a performance-linked compensation system and diverse training programs to enhance capabilities and support overseas expansion - As of June 30, 2024, the Group had a total of 20,576 employees on duty (including overseas)[42] Equity Incentive Plans The company's '2020-2022 Stock Ownership Plan' second lock-up period expired in May 2024, while the first phase of the '2023-2025 Stock Ownership Plan' failed to meet performance targets, leading to the disposal of unvested shares, and the second phase is approved but not yet implemented - The second lock-up period of the company's 2020–2022 Core Employee Stock Ownership Plan expired on May 26, 2024[44] - The first phase (2023) of the company's 2023–2025 Core Employee Stock Ownership Plan failed to meet performance assessment targets, and some unvested shares were recovered and disposed of by the Stock Ownership Plan Management Committee[50] - The second phase (2024) of the company's 2023–2025 Core Employee Stock Ownership Plan has been approved by the Board of Directors, but as of the end of the reporting period, the purchase of shares and grant of awards had not yet been completed[53] Other Information Covers additional disclosures such as dividend policies and significant events occurring after the reporting period Interim Dividends and Post-Balance Sheet Events The Board resolved not to declare an interim dividend for 2024, and post-reporting, the company successfully issued 1.1 billion yuan in technology innovation corporate bonds on August 14, 2024, to repay maturing debt - The Board resolved not to declare an interim dividend for 2024, nor to implement a capital increase from capital reserves[56] - Post-balance sheet event: On August 14, 2024, the company completed the issuance of 1.1 billion yuan in 5-year technology innovation corporate bonds with a coupon rate of 2.49%, with proceeds used to repay maturing bonds[56] Financial Report (Unaudited) Presents the company's unaudited consolidated financial statements, including balance sheet, income statement, and cash flow statement Consolidated Balance Sheet As of June 30, 2024, the company's total assets were 68.975 billion yuan, total liabilities 35.993 billion yuan, and total shareholders' equity 32.983 billion yuan, with the asset-liability ratio slightly increasing to 52.2% Key Items of Consolidated Balance Sheet (as of June 30, 2024) | Item | Amount (RMB) | | :--- | :--- | | Total Assets | 68,975,448,352 | | Total Current Assets | 14,892,060,709 | | Total Non-current Assets | 54,083,387,643 | | Total Liabilities | 35,992,702,978 | | Total Current Liabilities | 18,900,379,507 | | Total Non-current Liabilities | 17,092,323,471 | | Total Shareholders' Equity | 32,982,745,374 | | Equity Attributable to Parent Company Shareholders | 28,687,519,804 | Consolidated Income Statement In H1 2024, total operating revenue grew 2.56% to 16.237 billion yuan, but operating profit decreased 22.78% to 1.359 billion yuan, resulting in a 38.74% decline in net profit attributable to parent company shareholders to 731 million yuan Key Items of Consolidated Income Statement (H1 2024) | Item | H1 2024 (yuan) | H1 2023 (yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 16,237,373,654 | 15,831,572,500 | | Operating Profit | 1,359,412,532 | 1,760,441,304 | | Total Profit | 1,343,287,311 | 1,738,266,841 | | Net Profit | 1,021,686,381 | 1,349,942,719 | | Net Profit Attributable to Parent Company Shareholders | 730,553,374 | 1,192,560,395 | | Basic EPS (yuan/share) | 0.35 | 0.58 | Consolidated Cash Flow Statement In H1 2024, net cash flow from operating activities was 1.731 billion yuan, a 18.64% decrease, while net cash outflows from investing and financing activities significantly narrowed by 46.95% and 47.27% respectively, with cash and cash equivalents at period-end totaling 4.824 billion yuan Consolidated Cash Flow Statement Summary (H1 2024) | Item | H1 2024 (yuan) | H1 2023 (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,730,584,063 | 2,127,167,281 | | Net Cash Flow from Investing Activities | -1,178,576,055 | -2,221,519,537 | | Net Cash Flow from Financing Activities | -1,083,480,073 | -2,054,800,997 | | Net Increase in Cash and Cash Equivalents | -546,065,554 | -2,073,146,359 | | Cash and Cash Equivalents at Period End | 4,824,050,431 | 4,542,875,419 | Notes to Financial Statements The notes provide essential background and detailed information for understanding the financial statements, covering the company's basic situation, basis of preparation, significant accounting policies, estimates, and detailed explanations of major consolidated financial statement items