Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
ANHUI CONCH
HKEx Stock Code : 00914 
 
Corporate Profile
The principal activities of the Group are the manufacture and sale of clinkers and cement products.

Business Review - For the year ended December 31, 2012

During the Reporting Period, in accordance with the PRC Accounting Standards, the Group's revenue from its principal activities amounted to RMB45.063 billion, representing a decrease of 6.41% from that in the same period of last year; the net profit attributable to equity shareholders of the Company amounted to RMB6.308 billion, representing a decrease of 45. 58% from that in the same period of last year; and earnings per share were RMB1.19. In accordance with the IFRS, the revenue amounted to RMB45.766 billion, representing a decrease of 5.94% from that in the same period of last year; the net profit attributable to equity shareholders of the Company amounted to RMB6.331 billion, representing a decrease of 45. 36% from that in the same period of last year; and earnings per share were RMB1.19.

During the Reporting Period, the Group continued its development momentum, with project construction proceeding at a steady pace. Construction of the nine clinker production lines and their ancillary residual heat electricity generation units of Suzhou Conch, Zunyi Conch and Quanjiao Conch Cement Co., Ltd. (¡§Quanjiao Conch¡¨), as well as the 19 cement grinding units of Yangzhou Conch Cement Co., Ltd., Jianghua Conch Cement Co., Ltd. and Longling Conch Cement Co., Ltd. (¡§Longling Conch¡¨) had been completed and put into operation. As to merger and acquisition, the Group proactively conducted project research and feasibility study. Adhering to the principles of ¡§adequate resources, full set of equipment, complete approvals and certificates as well as strong market potential and competitiveness¡¨, the Group acquired six cement enterprises, including Sichuan Nanwei, Xinjiang Hami Construction Material Company and Guangxi Lingyun Cement. All the above resulted in additional clinker production capacity of 20.80 million tonnes and additional cement production capacity of 28.30 million tonnes in 2012.

As at the end of 2012, the Group's clinker production capacity and cement production capacity amounted to 184 million tonnes and 209 million tonnes respectively, with a total residual heat electricity generating capacity of 881MW. In 2012, the Group produced an aggregate of 154 million tonnes of clinker and 149 million tonnes of cement, representing a year-on-year increase of 13.81% and 17.17% respectively.

During the Reporting Period, the Group executed its strategies in terms of internationalisation at a steady pace. Phase-one of the cement project of PT Conch in Indonesia ¡V the Group's first overseas investment project, with a clinker production line of 3,200 t/d, commenced construction at the end of 2012. In addition, the Group also conducted an on-site survey and research on the subject projects in Southeast Asian countries including Vietnam and Malaysia.

During the Reporting Period, the Group proactively and persistently complied with the government's policies in respect of energy saving and emission reduction, and timely launched a technical research on nitrogen oxides (¡§NOx¡¨) reduction. The low-NOx staged combustion technology developed by the Group leveraging international advanced technology had been successfully applied in the 5,000 t/d clinker production line of Wuhu Conch. According to the test results released by Wuhu Environmental Monitoring Center, the NOx emission from the said production line was reduced by approximately 30%. It had also shown a remarkable result in reducing emission. Meanwhile, 15 clinker production lines of the Group's subsidiaries including Chongqing Conch and Jiande Conch were successfully upgraded with the said technology.

After years of continuously rapid and healthy development, the Group has gained relatively extensive experience in operation management and tailored scientific and sound development strategies to fit its own conditions, and has thus developed competitive advantages in technology, equipment, resources, funds, human resources and management. During the Reporting Period, the Group fully leveraged these advantages to implement the Company's development strategies in a proactive and prudent manner, and continued to pursue management innovation, technical upgrade, energy conservation and emission reduction, so as to further strengthen and enhance the Company's core competitiveness.

Business Outlook - For the year ended December 31, 2012

2013 is a crucial year of transition in respect of the 12th Five Year Plan. The PRC government will strengthen and improve macro-control, continue to implement proactive fiscal policy and prudent monetary policy as well as to promote a sustainable and healthy economic development. A year-on-year GDP growth rate of approximately 7.5% is anticipated. Fixed asset investments across the country is expected to attain a year-on-year growth of 18%. (Source: ¡§Government Work Report¡¨/National Development and Reform Commission)

In 2013, excessive production capacity and structural adjustment in the cement industry will remain unchanged, while new production capacity will reduce significantly and the supply-anddemand condition will further improve. In the aspect of demand, cement demand will maintain stable growth with the construction of infrastructure projects such as railway, highways and hydraulic facilities as well as affordable housing, driven by the PRC government's proactive and prudent measures to facilitate urbanization and the development of a modernized agricultural industry. Meanwhile, with the increasingly stringent environmental protection requirements and the continuity and deepening of the structural adjustment of the economy, small cement enterprises with weaker competitiveness will encounter greater pressure, while major enterprises may take the opportunity to merge with, acquire and restructure these enterprises to expedite industry consolidation, which will in turn raise the industry's concentration level.

In 2013, the Group will capture the opportunity arising from the structural adjustment of the cement industry in the PRC to accelerate construction of new projects and projects in progress. Meanwhile, by proactively implementing the Guiding Opinions for Accelerating the Mergers and Acquisitions among Enterprises in Key Industries jointly promulgated by 12 national ministries of the PRC including the Ministry of Industry and Information Technology, the Group will step up its merger and acquisition activities in Central and West China. In addition, the Group will continue to proactively and prudently execute its international strategies, proceed with the construction of the cement project in South Kalimantan of Indonesia and identify other suitable overseas projects. Furthermore, the Group will explore and extend its business into the upstream and downstream industries, increasing its investments in the aggregate project and entering the commodity concrete market when suitable opportunity emerges.

In 2013, the Group's planned capital expenditure amounts to approximately RMB8.2 billion (excluding merger and acquisition expenditure), which will be funded primarily by internal resources and supplemented by bank loans and mainly used in the construction of the cement and clinker production lines and ancillary residual heat electricity generation projects of Baoshan Conch Cement Co., Ltd. and Qianxian Conch Cement Co., Ltd. (¡§Qianxian Conch¡¨). It is expected that the clinker and cement production capacity will increase by approximately 15.40 million tonnes and 22.45 million tonnes respectively for the full year.

In 2013, the Group will closely monitor the changes in the macro-business environment, study and assess the market conditions more closely and reinforce coordination among the regional markets so as to expand its market share. The Group will further improve its internal control system and strengthen its internal management to enhance its management standard. Furthermore, the Group will continue to optimize the remuneration incentive scheme and attract and cultivate talents to facilitate sustainable development of the Company. The Group targets to increase the net sales volume of cement and clinker by approximately 20% year-on-year. It is expected that the cost and expense of the products per ton will remain stable as compared to that of last year.

Source: Anhui Conch (00914) Annual Report 2012
Chairman Guo Wensan Issued Capital (shares) 1,300M
Par Value RMB 1 Market Capitalisation (HKD) 32,295M
 
Login
Password
Register  Forget Password
Advanced Search
© 2024 The Standard, The Standard Newspapers Publishing Ltd.
Home | Business | Metro | Focus | Opinion | Markets | World | Sports | Entertainment | Monday Money | Property | Macau | Weekend