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Cement industry profits hit a record high, conch cement pre-earnings about 30 billion

January 11, 2019 05:26
Author: Liu Canbang

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Summary
[Cement industry profits hit a record high, Conch cement pre-earnings of about 30 billion] Lianxun Securities judged that cement prices will be rebalanced between supply and demand and prices in 2019, but the high probability may be "high point is not high (not higher than 2018 Year), the low point is not low (not less than 2018). For the reason, it is mainly that the demand side and the supply side are unlikely to have large marginal changes. (Securities Times)


K map 600585_1

Cement industry's profit increased greatly, leadingPerformanceEspecially bright. Conch Cement (600585) on the evening of January 10announcementSaid that it is expected to be 2018Net profitCompared with the same period of the previous year, it increased by 12.684 billion yuan to 15.855 billion yuan, a year-on-year increase of 80% to 100%; the non-net profit will increase by 14.078 billion yuan to 16.893 billion yuan, a year-on-year increase of 100% to 120%.

Conch Cement has achieved a high net profit of 15.855 billion yuan in 2017. According to this calculation, the company is expected to belong to the listed company from January to December 2018.shareholderThe net profit was 28.539 billion to 31.71 billion, which was the best performance in the history of Conch Cement itself.

In response to the sharp increase in performance, Conch Cement explained that last year, benefiting from the positive impact of the structural reform of the supply side of the cement industry, the relationship between supply and demand in the market continued to improve, and the sales price of the company's products increased significantly year-on-year.Operating incomeThe year-on-year growth, the company's net profit attributable to shareholders of listed companies increased significantly year-on-year.

Huaxin Cement (600801) just announced its significant increase in its performance on January 9. Among the cement enterprises that have predicted the annual results of 2018, Huaxin Cement's net profit for 2018 is 4.97 billion yuan to 5.39 billion yuan, a year-on-year increase of 139% to 159%; Wannianqing (000789) 2018 net profit is 1.06 billion yuan to 1.25 billion yuan. , a year-on-year increase of 130% to 170%; Jidong Cement (000401) 2018 net profit of 1.45 billion yuan to 1.53 billion yuan, an increase of 188% to 204%.

Although the reasons for the pre-increased performance of the above-mentioned companies have their own characteristics, they all benefit from the increase in the prices of cement and clinker. At the meeting held on December 21 last year, Kong Xiangzhong, executive vice president of China Cement Association, revealed that the total profit of the national cement manufacturing industry in the first three quarters was 109.4 billion yuan, an increase of 88.8% (full calibre) over the same period of the previous year. Over the full year of 2017 (87.7 billion yuan), it is estimated that the annual industry profit will exceed 140 billion yuan.

This means that the total profit of the cement industry in 2018 broke the record of the industry's profit of 102 billion yuan in 2011, and the record high was basically confirmed. According to previous data, in 2017, China's cement industry realized revenue of 914.9 billion yuan, and total profit was 87.7 billion yuan.

However, the Securities Times reporter noted that since December last year, the price of cement in many places in the country has declined to a certain extent. For example, on December 5 last year, cement prices in Chongqing fell down by RMB 20/ton. The reasons for this include various aspects: first, due to the continuous rain weather, market transactions were suppressed; second, the new capacity in the field was low. The price entered Chongqing, which caused certain impact on the local market. Third, the price of clinker in Chongqing in the early period fell sharply, which also affected the cement price.

Since late December last year, cement prices in East China have also been affected by factors such as frequent rains and rains. Local cement demand has fallen by 5% to 15% from the previous month, and many companies have started to cut prices. The latest situation is that on January 5, the price of clinker in the Yangtze River Delta region was significantly reduced by 160 yuan/ton, and the shipping price along the Yangtze River dropped from 520 yuan/ton to 360 yuan/ton.

However, the market believes that the sharp drop in cement and clinker prices along the Yangtze River Delta is basically in line with expectations. On the one hand, since January this year, the downstream demand has been seasonally weakened. The original production line has resumed production and the clinker supply is sufficient. On the other hand, imported cement clinker continues to flow in, and there is a tendency to seize the market share in the off-season. Stabilize market share and adopt a one-time large price reduction strategy.

Lianxun Securities judges that cement prices will be rebalanced between supply and demand and prices in 2019, but the high probability may be "high point is not high (not higher than 2018), low point is not low (not lower than 2018)" The situation, for reasons, is mainly that the demand side and the supply side are unlikely to have large marginal changes.

(Article source: Securities Times)

                (Editor: DF407)

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