Huaxin Cement Co.Ltd(600801) accelerated the internationalization process. On March 28, Huaxin Cement Co.Ltd(600801) ( Huaxin Cement Co.Ltd(600801) . SH) 735 million domestic listed foreign shares (B shares) were officially converted to the place of listing and listed and traded on the main board of the stock exchange of Hong Kong Limited in the form of introduction, which is also the first case of B to h in Shanghai Stock Exchange. This B to H transfer does not belong to IPO, nor does it involve the issuance of new shares.
On March 29, Huaxin Cement Co.Ltd(600801) released its annual report for 2021, which shows that the company has more than 270 subsidiaries in 14 provinces and cities in China and overseas Tajikistan, Kyrgyzstan, Uzbekistan, Cambodia, Nepal, Tanzania, Zambia and Malawi, and the overseas cement grinding capacity has reached 10.83 million tons / year.
In an interview with 21st Century Business Herald, a senior person in the cement industry said that Huaxin Cement Co.Ltd(600801) has the background of overseas shareholders, and “B to h” is conducive to opening up overseas financing channels. With the support of overseas shareholders, the company’s overseas strategy is superior to other peers.
accelerate the internationalization process
Huaxin Cement Co.Ltd(600801) was listed on Shanghai Stock Exchange in 1994. As the first case of b-to-h conversion in Shanghai stock market, Huaxin Cement Co.Ltd(600801) share conversion was launched in July 2020. In August 2020, Huaxin Cement Co.Ltd(600801) announced that the company is planning to convert domestic listed foreign shares into listed places, list them on the main board of the Hong Kong Stock Exchange in the form of introduction, and disclose the trading scheme. On September 30, 2021, Huaxin Cement Co.Ltd(600801) submitted the prospectus to the Hong Kong stock exchange.
Under the background that the average daily turnover of A-Shares exceeds trillion yuan, the activity of B-share market is low and the liquidity is insufficient, which has become more and more marginalized. In addition to solving the current situation of inactive B-share trading, Huaxin Cement Co.Ltd(600801) another consideration of “B to h” is the internationalization strategy. According to Huaxin Cement Co.Ltd(600801) previous announcement, “after the implementation of B to h scheme, it is conducive to further improve the corporate governance structure of the company and accelerate the internationalization process of the company”.
According to the annual report, Huaxin Cement Co.Ltd(600801) has an overall capacity of 116 million tons of cement per year (grinding capacity, including the capacity of joint ventures), 43.8 million m3 of commercial concrete per year, 154 million tons of aggregate per year, 700 million cement bags per year and 5.53 million tons of waste disposal per year (including under construction). According to the calculation of Minsheng securities, Huaxin Cement Co.Ltd(600801) has the seventh annual cement grinding capacity in the world and the second aggregate capacity in China.
At the same time, Huaxin Cement Co.Ltd(600801) overseas expansion is also accelerating. Last year, Huaxin Cement Co.Ltd(600801) completed the delivery of acquired assets of Zambian and Malawian cement, adding 1.75 million tons of cement capacity; Complete the line grinding transformation of marvini factory in Tanzania; Nepal narayani 2800t / d cement clinker production line project was ignited and put into operation on January 8 this year.
It is worth noting that Huaxin Cement Co.Ltd(600801) has a strong background of overseas shareholders. Lafarge Haorui and Huaxin group, 100% controlled by Hubei Huangshi SASAC, are the first and second largest shareholders of the company. The above-mentioned senior people believe that Huaxin Cement Co.Ltd(600801) has the compound gene of foreign capital and state-owned capital. At present, the company has a relatively clear construction and production plan for clinker, aggregate and concrete production capacity, and has a relatively certain performance growth space compared with other peers. In the H shares with more active transactions, it is expected that Huaxin Cement Co.Ltd(600801) will make new moves.
Huaxin Cement Co.Ltd(600801) disclosed in the annual report that it plans to invest 12.2 billion yuan in 2022, mainly in aggregate, overseas cement and integrated business. Among them, the planned warrant investment is about 6 billion yuan and the fixed asset investment is nearly 4 billion yuan.
However, in the face of the complex international situation, Huaxin Cement Co.Ltd(600801) also said that many uncertain factors such as international operation talent reserve, epidemic situation, exchange rate fluctuation and trade friction will bring challenges to the company’s international operation and development.
new “battlefield” of industry competition
2021 is the first year of the 14th five year plan and the first year of China’s “double carbon” action. Facing many challenges such as overcapacity, environmental protection and low-carbon overweight, tight energy supply and so on, the cement industry has experienced significant fluctuations in demand and supply.
From the current performance of listed cement companies, the revenue or profits of many companies have declined to varying degrees Anhui Conch Cement Company Limited(600585) , Gansu Qilianshan Cement Group Co.Ltd(600720) are facing the situation of both revenue and net profit Xinjiang Tianshan Cement Co.Ltd(000877) revenue continued to grow, but net profit declined.
According to the annual report, Huaxin Cement Co.Ltd(600801) achieved an operating revenue of 32.464 billion yuan in 2021, an increase of 10.59% over the previous year; The total profit was 7.373 billion yuan, and the net profit attributable to the shareholders of the parent company was 5.364 billion yuan, down 3.79% and 4.74% respectively over the same period last year.
However, at the Huaxin Cement Co.Ltd(600801) sales end, in addition to the slight decline in the total sales of cement and clinker compared with the previous year, the aggregate sales volume was 34.97 million tons, a year-on-year increase of 51.71%; The total disposal of environmental protection business was 3.28 million tons, a year-on-year increase of 11.56%; The sales volume of commercial concrete was 9.05 million m3, a year-on-year increase of 96.49%.
This has something to do with Huaxin Cement Co.Ltd(600801) accelerating the layout of non cement business and realizing the integrated transformation and development of aggregate, concrete and other industrial chains with cement business as the core. In 2021, the revenue of cement business accounted for 79% of the total Huaxin Cement Co.Ltd(600801) operating revenue, but the non cement business increased steadily.
Today, driven by the “double carbon” goal, the cement industry has developed to a key node. The weakening demand for cement has made the problem of overcapacity more prominent. The cement industry is still the key industry in the supply side structural reform. At the same time, the production cost is rising, the cement price is under pressure, and it is more difficult to stabilize the benefits of the industry. In the context of overcapacity, Huaxin Cement Co.Ltd(600801) believes that energy conservation and carbon reduction and industrial chain expansion have become a new “battlefield” for the development of industry competition.
Huaxin Cement Co.Ltd(600801) took the lead in releasing the 20252060 “carbon peaking, carbon neutralization” double carbon emission reduction path white paper in the industry, and proposed the layout of carbon reduction path through the extensive use of alternative raw fuels, improving the intelligent level of industrial system, and carrying out the pilot of heat cogeneration and carbon reduction of cement aggregate wall materials integration project.
Based on the stable operation of China’s cement business, Huaxin Cement Co.Ltd(600801) said that in 2022, it will accelerate the integrated layout of aggregate, wall materials and concrete business, improve the disposal of hazardous wastes in environmental protection business, accelerate the development of overseas business, and make market breakthroughs in new materials business to ensure the increase of production capacity and benefit expansion.
Not only Huaxin Cement Co.Ltd(600801) , but also many leaders in the cement industry are continuing to expand the industrial chain, promote industrial collaborative utilization, digital intelligence and layout of new energy. For example, Anhui Conch Cement Company Limited(600585) announced a new energy business investment plan on March 9, which plans to spend 5 billion yuan on the development of photovoltaic power stations and energy storage projects.
