ASIA CEMENT (CHINA) HOLDINGS CORPORATION Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
Asia Cement (China) Holdings Corporation
亞 洲 水 泥（中 國）控 股 公 司
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 743)
ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE
THREE MONTHS ENDED 31 MARCH 2021
SUMMARY
The directors ("Directors") of Asia Cement (China) Holdings Corporation (the "Company") announce the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the three months ended 31 March 2021. This announcement is made as part of the Company's practice to publish its financial results quarterly and pursuant to paragraph 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Listing Rules").
The unaudited consolidated profit attributable to owners for the three months ended 31 March 2021 was approximately RMB467.3 million.
The Directors of the Company are making this announcement of the Group's unaudited consolidated results for the three months ended 31 March 2021 in line with its practice to publish the Group's financial results quarterly and pursuant to paragraph 13.09 of the Listing Rules.
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CONDENSED CONSOLIDATED INCOME STATEMENT | ||||
For the three months ended | ||||
31 March | ||||
2021 | 2020 | |||
RMB'000 | RMB'000 | |||
(Unaudited) | (Unaudited) | |||
Revenue | 2,298,385 | 1,287,289 | ||
Cost of sales | (1,535,992) | (728,734) | ||
Gross profit | 762,393 | 558,555 | ||
Other income | 40,179 | 57,321 | ||
Other gains and losses | 7,836 | (139) | ||
Distribution and selling expenses | (101,330) | (63,299) | ||
Administrative expenses | (65,728) | (185,133) | ||
Share of profits of joint ventures | 2,174 | 244 | ||
Share of losses of associates | (2,496) | (2,330) | ||
Finance costs | (9,946) | (52,987) | ||
Profit before tax | 633,082 | 312,232 | ||
Income tax expenses | (152,351) | (92,163) | ||
Profit and total comprehensive income for the period | 480,731 | 220,069 | ||
Profit and total comprehensive income for | ||||
the period attributable to: | 467,344 | |||
Owners of the Company | 210,057 | |||
Non-controlling interests | 13,387 | 10,012 | ||
480,731 | 220,069 | |||
RMB | RMB | |||
Earnings per share: | 0.298 | |||
Basic | 0.134 | |||
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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at | As at | ||
31 March | 31 December | ||
2021 | 2020 | ||
RMB'000 | RMB'000 | ||
(Unaudited) | (Unaudited) | ||
NON-CURRENT ASSETS | 7,448,208 | ||
Property, plant and equipment | 7,586,580 | ||
Quarry | 984,770 | 999,574 | |
Investment properties | 123,247 | 123,247 | |
Goodwill | 554,241 | 554,241 | |
Other intangible assets | 4,413 | 4,822 | |
Interest in joint ventures | 67,189 | 60,515 | |
Interest in an associate | 715,528 | 718,025 | |
Deferred tax assets | 108,223 | 110,571 | |
Right of use assets | 842,366 | 802,275 | |
10,848,185 | 10,959,850 | ||
CURRENT ASSETS | |||
684,665 | |||
Inventories | 608,368 | ||
Trade and other receivables | 2,331,417 | 2,385,038 | |
Note receivables | 2,418,238 | 2,401,163 | |
Amount due from an associate | 2,287 | 4,224 | |
Other financial asset | 65,713 | - | |
Bank balances and cash | 5,352,799 | 5,275,608 | |
10,855,119 | 10,674,401 | ||
CURRENT LIABILITIES | |||
1,004,835 | |||
Trade and other payables | 1,204,170 | ||
Contracts liabilities | 197,976 | 229,310 | |
Amount due to joint ventures | 16,993 | 13,490 | |
Tax payables | 147,197 | 494,122 | |
Borrowings - due within one year | 977,126 | 872,988 | |
Lease liability - current | 6,803 | 6,007 | |
2,350,930 | 2,820,087 | ||
NET CURRENT ASSETS | 8,504,189 | 7,854,314 | |
TOTAL ASSETS LESS CURRENT LIABILITIES | 19,352,374 | 18,814,164 | |
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As at | As at | ||
31 March | 31 December | ||
2021 | 2020 | ||
RMB'000 | RMB'000 | ||
(Unaudited) | (Unaudited) | ||
NON-CURRENT LIABILITIES | 2,151,962 | ||
Borrowings - due after one year | 2,099,171 | ||
Lease liability | 98,411 | 98,428 | |
Deferred tax liabilities | 52,354 | 47,176 | |
Provision for environmental restoration | 37,689 | 38,161 | |
2,340,416 | 2,282,936 | ||
NET ASSETS | 17,011,958 | 16,531,228 | |
CAPITAL AND RESERVES | |||
140,390 | |||
Share capital | 140,390 | ||
Reserves | 16,476,040 | 16,008,693 | |
Equity attributable to owners of the Company | 16,616,430 | 16,149,083 | |
Non-controlling interests | 395,528 | 382,145 | |
TOTAL EQUITY | 17,011,958 | 16,531,228 | |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT | ||||
For the three months ended | ||||
31 March | ||||
2021 | 2020 | |||
RMB'000 | RMB'000 | |||
(Unaudited) | (Unaudited) | |||
Net cash from operating activities | 97,572 | 447,038 | ||
Net cash used in investing activities | (167,352) | (20,176) | ||
Net cash from financing activities | 146,971 | 2,213,279 | ||
Net increase in cash and cash equivalents | 77,191 | 2,640,141 | ||
Cash and cash equivalents at beginning of the year | 5,275,608 | 7,942,576 | ||
Cash and cash equivalents at 31 March | 5,352,799 | 10,582,717 | ||
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The Group's unaudited consolidated results for the three months ended 31 March 2021 have been prepared in accordance with the same accounting policies adopted by the Group as disclosed in the last annual report for the year ended 31 December 2020.
The Directors do not recommend payment of a dividend in respect of the first three months of 2021 (2020: Nil).
Business Review and Prospects
In the first quarter of 2021, the economy was getting stronger and improving while maintaining stability, with increased market activities, greater production demand, employment and price stability, and people's livelihood ensured. China's national economy has made a good start. But at the same time, the coronavirus outbreak was still spreading across the world, the international environment remained complicated, the foundation for domestic economic recovery was fragile, and the long-standing structural problems continued to persist. In the first quarter of 2021, the national gross domestic product ("GDP") increased by 18.3% year-on-year, and rose by 5% based on a two-year average growth; the fixed asset investment of China increased by 25.6% year-on-year, and rose by 2.9% based on a two- year average growth; the national infrastructure investment increased by 29.7% year-on-year, and rose by 2.3% based on a two-year average growth; the national property development investment increased by 25.6% year-on-year, and rose by 7.6% based on a two-year average growth.
The persistent effects of the investment stabilization policies in early 2021, coupled with the government's calls for people to stay put during Chinese New Year had caused cement market activities to pick up earlier after Chinese New Year. High demand from downstream real estate sector and infrastructure construction supported rising cement output. From January to March 2021, the total national cement output was 439 million tonnes, up by 47.3% from that of the same period of 2020. Cement output in March amounted to 197 million tonnes, up by 33.1% from that of the same period of 2020.
The January to February period is the traditional low season for the cement market. The overall market demand in the middle and lower reaches of the Yangtze River was weak. During the period, the price of clinker along the river decreased by RMB80 per tonne, and the price of cement continued to decrease by RMB40-60 per tonne. After Chinese New Year, there were sufficient workers in various places as they stayed behind during the festive holiday and the weather continued to be fine; as such construction at construction sites and projects in general started earlier than in previous years, thus boosting cement demand. The aforesaid coupled with strict implementation of off-peak season production and restricted production with respect to the supply side, as well as the inventory of major enterprises staying at low levels had tightened the supply of cement and clinker. As of mid-April, clinker along the Yangtze River had undergone four rounds of price increases, with a cumulative increase of RMB100 per tonne. Cement in the middle and lower reaches of the river had also experienced two rounds of upward adjustments, with an increase of RMB40-60 per tonne, and further price increase is expected in the markets in the lower reaches of the river. The Sichuan
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market was severely impacted by cement from surrounding areas from January to February, with a cumulative drop of RMB30 per tonne. Entering March, as local enterprises diligently executed off-peak season production and demand rapidly recovered, the extent of impact of cement from surrounding areas had decreased, easing supply-demand imbalance. At the end of March, the Chengdu market had a one-time price adjustment of RMB50 per tonne, and cement prices are expected to stabilize in the future.
In the first quarter of 2021, the Group's cement and clinker sales volume was 6.25 million tonnes, while in the same period of 2020, the sales volume of the Group's cement products was only 3.04 million tonnes due to the novel coronavirus pandemic. In the second quarter, all each company will have completed the overhaul of kilns, which have been shut down for maintenance. Following this, the Group will be able to fully utilize its production capacity. It is expected that the Group's cement and clinker sales volume in the second quarter will reach 8.2 million tonnes, which is almost the same as the 8.1 million tonnes achieved in the same period of 2020.
2021 is the 100th anniversary of the founding of the Communist Party of China. The "14th Five-Year Plan" will commence in 2021, and a new journey of building a modern socialist country will begin. While the economy continues to recover steadily and supply-side structural reforms persist, the cement industry is also facing both opportunities and challenges. In 2021, the Group still has a lot to do:
On the demand side, as China has achieved remarkable results in epidemic prevention and control efforts, its economy continues to recover rapidly and infrastructure investment, being a major support for stabilising economic growth, continues to come into play. All this will have huge positive impact on cement demand. In 2021, the government of the People's Republic of China ("PRC") proposed to focus on supporting "two new-types and one major development" (new-type of infrastructure development, new-type of urbanization and development of major engineering projects for transportation and water conservancy). It issued the "National Comprehensive Three-dimensional Transportation Network Planning Outline" and proceeded with the construction of major projects and actively planned and prepared for stabilizing investment. According to inexhaustive statistical report, during 2021 or 2020, the number of major projects nationwide collectively commencing construction had exceeded 10,000, with a total investment scale of RMB4,412.4 billion.
On the supply side, the state promotes normalization (with specified periods and specified areas) of execution of off-peak season production of cement, which is conducive to maintaining strict control over the output on the supply side. At the end of 2020, the Ministry of Industry and Information Technology and the Ministry of Ecology and Environment of the PRC jointly issued the "Notice on Further Normalization of Off-Peak Season Cement Production" to further implement and fine-tune the mechanism for normalization of off- peak season production. As the provincial governments of major cement producing provinces including Jiangxi and Anhui take part in the supervision of off-peak season production this year, the cement supply in the middle and lower reaches of the Yangtze River where the Group has significant presence will further be reduced. The regional cement supply-demand imbalance will be eased and price is expected to find support.
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The March to May period is a "minor peak season" for the traditional cement industry. Based on moderate market demand and relatively stable market prices, the Group expects to maintain a relatively high level of profitability in the second quarter. The Group will continue to work hard to explore its own potential, reduce costs, continue to promote enterprise informatization and intelligent transformation, so as to enhance its overall competitiveness. Given the country's economic trends and industry market dynamics, the Group's management is optimistic about achieving its expected profit targets.
By Order of the Board
Asia Cement (China) Holdings Corporation
HSU Shu-tong
Chairman
Hong Kong, 28 April 2021
As at the date of this announcement, the executive Directors are Mr. HSU Shu-ping, Mr. CHANG Tsai-hsiung, Dr. WU Chung-lih, Mr. CHANG Chen-kuen, Mr. LIN Seng-chang and Ms. WU Ling-ling; the non-executive Director and Chairman is Mr. HSU Shu-tong; the independent non-executive Directors are Mr. TSIM Tak-lung Dominic, Mr. WANG Wei, Mr. LEE Kao-chao and Dr. WANG Kuo-ming.
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Asia Cement (China) Holdings Corporation published this content on 28 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2021 09:50:04 UTC.
