The Traditional Peak Season Of "Gold, Nine, Silver And Ten" In Cement Industry Starts Enterprise Extension Merger And Acquisition, And Internal Incentive Is Parallel

After entering September, the traditional peak season of cement industry started, the prosperity continued to rise, and the price rose generally, which reversed the dilemma of both quantity and price falling.

Due to the double suppression of the epidemic situation and the rainy season in the middle of the year, the cement prices in many regions were lower than those in the same period last year. However, since July, the cement prices have rebounded strongly. In the first week of September, the price of cement in the Yangtze River Delta region, as a weathervane of the national cement market, continued to lead the rise. The overall price in East China rose by more than 7 yuan / ton on a weekly basis. Since August, it has risen nearly 20 yuan / ton, but the current price is still lower than the same period last year. Judging from other demand indicators, the clinker storage capacity ratio in East China this week has dropped below 50%, and the mill operating rate has exceeded 82%, returning to the top level in the peak season of the first half of the year.

On September 9, Zheng Jianhui, chief researcher of China cement.com.cn and China Cement Research Institute, said in an interview with 21st century economic reporter: "cement prices have risen since July. Up to now, the national cement price index (cempi) has risen nearly 4%, which is about half a month earlier than the same period last year. On the one hand, under the double influence of the previous epidemic situation and the super long plum rain, the cement price is in the stage of over falling repair; on the other hand, it benefits from the current domestic cement market demand is in the vigorous stage. "

Digital cement network information has predicted that the total profit of cement industry in the first half of the year is expected to be about 80 billion yuan. Although the cement industry is under pressure in the first half of the year, Zheng Jianhui said that the cement industry has been affected by the long-term downward trend of the cement industry. In the first half of the year, investment in infrastructure and other factors will continue to pick up

Extension merger and acquisition

In the first half of 2020, the cement industry will be happy to be listed. Ningxia building materials, Shangfeng cement, Jiangxi Wanqing, etc. all showed a year-on-year increase in net profit; the performance growth of Tianshan shares slightly exceeded the expected; Fujian cement achieved a net profit of turning loss into profit in the first half of the year compared with the same period last year due to the large growth of sales volume and selling price of Fujian cement. However, the benefits of companies seriously affected by the epidemic situation declined significantly, including Huaxin Cement, Jidong Cement and Asia cement. The net profit attributable to shareholders of Listed Companies in the first half of the year decreased year on year, mainly due to the decrease of sales volume and selling price of products.

Under this background, the arrival of "golden nine silver ten" traditional peak season makes cement enterprises want to seize the opportunity to boost performance. Previously, in order to promote the solution of the same industry competition problems, Tianshan shares (000877. SZ) announced the acquisition of China building materials cement plate assets. Once the acquisition is completed, the cement industry will be born a new leader, and the domestic cement industry is expected to rapidly form a "duopoly" competition pattern.

After half a month's preparation, Tianshan company quickly launched the detailed merger and acquisition plan in early August: it plans to issue shares to the controlling shareholder China Building Materials Co., Ltd. and other counterparties by issuing shares to purchase 100% shares of Zoomlion cement, 99.93% shares of Nanfang cement, 95.72% shares of Southwest cement and 100% shares of Sinoma cement. It is planned to issue shares to no more than 35 eligible shareholders Specific investors with conditions will raise matching funds in the form of non-public offering of shares, with an estimated scale of about 5.7 billion yuan. After the completion of the major asset restructuring transaction, the cement production capacity of Tianshan company is expected to reach 430 million tons, and it will become the largest cement enterprise in China.

On the evening of September 7, the update announcement of Tianshan shares disclosed the progress after the major asset restructuring plan. "At present, the audit, evaluation and other related work related to this major asset restructuring are being actively promoted. After the relevant work is completed, the company will hold a meeting of the board of directors to review the relevant matters of this major asset restructuring, and the board of directors will call a general meeting of shareholders to review the proposals related to this major asset restructuring," said Tianshan However, the final landing still needs to go through many hurdles, such as anti-monopoly review, approval of state-owned assets, and deliberation by the general meeting of shareholders. Therefore, the transaction is still uncertain.

In addition, earlier this year, Sichuan Shuangma announced that the company and southwest Cement Co., Ltd. signed the "cooperation intention agreement" on May 29, 2020, and the two sides intend to carry out cement business cooperation. Guizhou southwest cement plans to acquire 100% equity of Zunyi Lifeng cement held by Sichuan Shuangma.

Chen Bailin, Deputy Secretary General of China Cement Association, said: "in the first half of the year, the industry profit basically recovered to the same period last year. The policy trend in the second half of the year will encourage and support enterprises to actively explore various merger and reorganization modes, integrate resources, give full play to the leading role of large enterprise groups in environmental protection, intelligent manufacturing, intelligent logistics, etc., accelerate the transformation and upgrading of the industry and optimize the market We should make full use of industrial policies to promote the supply side structural reform of the industry

Improve quality and efficiency

On the other hand, it is one of the common measures to improve the company's performance by reducing costs and increasing efficiency.

According to the construction plan of Guangdong Hong Kong Macao inter city railway approved in early August, the cement demand planned in the near future can reach 12.4 million tons, which will stimulate the cement demand of Guangdong in a long time. According to the plan of key construction projects in Guangdong Province in 2020, the proportion of investment in key projects in eastern Guangdong Province is expected to increase in the next few years. Infrastructure demand has also become an important point of cement demand in eastern Guangdong. The second half of the year is the peak cement demand season in the southern region.

The second 10000 ton line of Guangdong tapai Group Co., Ltd. was successfully put into operation in the first half of 2020, with the existing clinker production capacity of 14.63 million tons and cement production capacity of 22 million tons, ranking the third in Guangdong Province and occupying more than 60% of the market share in eastern Guangdong.

Wang binpeng, an analyst of Huachuang building materials, said: "in recent years, tapai group has been facing the pressure of rising fuel costs and cost control per ton. The expansion of production capacity will further dilute the fixed costs in the medium and long term, create cost and price advantages, and superimpose transportation cost restrictions. The company is expected to squeeze the original external product input in eastern Guangdong to help it further increase its market share."

In addition to their own reform and technological innovation, the way to improve the production capacity and efficiency of the cement industry is to reward core employees, lock in and improve the working enthusiasm of the company's core employees, so as to cope with the more difficult market environment in the future.

Taking Huaxin Cement as an example, its performance declined significantly due to the impact of the epidemic. Due to its location in Wuhan, Huaxin Cement's net profit attributable to the owner of the parent company in the first half of the year was 2.2 billion yuan, a year-on-year decrease of 28.79%, and the operating income of 12.5 billion yuan, a year-on-year decrease of 12.67%.

At the same time, in view of the slowdown in the development of the domestic real estate market, as the infrastructure investment that stimulated the economy in the past has also shifted to "new infrastructure" such as 5g, UHV and data center, the development opportunities faced by cement enterprises in the future have also been reduced.

In this regard, Huaxin Cement actively launched a buyback plan. On the evening of August 12, Huaxin Cement issued a plan to expand share repurchase, which was expanded by four times on the original basis, and Huaxin Cement's employee stock ownership was upgraded. As for the reasons for the expansion of buyback, Huaxin Cement said: "in view of the expansion of the performance index assessment scope of the company's core employee stock ownership plan, and the corresponding increase in incentive amount, the company has decided to increase the total amount of funds for the repurchase of the company's shares. In line with the expansion of buyback, Huaxin Cement has also issued a draft of the core employee stock ownership plan for 2020-2022. The employee stock ownership plan of Huaxin Cement is divided into two plans, plan a and plan B. among them, plan a is linked to the company's annual performance appraisal, and plan B is linked to the company's "milestone" performance evaluation. The total capital scale is expected to reach 610 million yuan. "

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