Cement Industry's Quarterly Report 2011 Earnings and Operational Capability Analysis

In the first quarter of 2011, the overall operating conditions of the cement industry showed a 'retreat from the south to the south'. The obvious characteristics: Cement companies such as Conch, Huaxin, Jiangshui, Tongli and Taguig in the southern region all experienced a year-on-year increase of more than 100%; In the region (except Xinjiang), major cement companies such as Jidong, horse racing, Qilianshan, and other cement companies all recorded year-on-year declines; the performance of Xinjiang Tianshan and Qingsong Xinjiang’s cement companies in the Xinjiang Autonomous Region decreased year-on-year mainly due to the first year of leaping development in Xinjiang in 2011. The strength of cement or clinker has been greatly enhanced over previous years, and the cost side has been increased. As Tianshan has 40% of its production capacity in Jiangsu, the profitability of this division has been greatly improved in the first quarter of this year, and therefore it has reduced its losses year-on-year;

The industry's profitability in the first quarter rose sharply on schedule

In the off-season in the first quarter, the analysis focused on year-on-year indicators. Aggregate the listed companies in the consolidation industry. In the first quarter of 2011, operating income increased by 51.43%, operating costs increased by 32.06%, operating profit increased by 279.07%, and net profit attributable to the parent company increased by 162.17%. The substantial increase in industry profitability is fulfilled as scheduled!

The sub-departments show a marked ''southward retreat'' feature

The benefit prices of cement companies in the south (except southwest and southwestern China) have increased substantially year-on-year, the cost increase rate has been limited, the gross profit margin has been increased, and the profit growth rate is much higher than the income growth rate. Such as Conch, Huaxin, Jiangshui, Tongli, Ta-Pak, Chaodong, Jianfeng, Fujian; Southwestern region was affected by the huge impact of new production capacity; Sichuan Shuangma and Sichuan Jinding’s performance declined year-on-year; north, especially the northwest region (except Outside Xinjiang, the cement business in the 1st quarter of 2011 has declined. Northwest horse racing, Qilianshan, Yatai, ST Qinling, and Xishui have seen year-on-year declines. Although North China's regional prices have improved faster than cost, Jidong Cement's operating revenue has increased by 75% over the cost growth rate of 68%, and operating profit has increased year-on-year. It increased by 446%, but due to the loss of capacity in Shaanxi, investment income dropped sharply, and the 1st quarter results showed a loss. The key rate indicators of various companies meet the above analysis;

The cement industry is operating normally in the first quarter

Analysis of industry and listed company inventory, accounts receivable, accounts payable, purchase of goods to pay cash, sales of goods received cash and other subject changes, the cement industry in normal operating capacity in the first quarter, no exceptions. For details, please refer to the contents of the report;

The first push in Xinjiang in the second quarter, focusing on the positive impact of power curtailment events on Southern Cement

In the second quarter, we decisively promoted the Tianshan shares of Xinjiang and the construction of Qingsong. The fundamental perspectives of the cement industry in East China and Central South China: The performance was determined and the demand side was protected. In May-June, we focused on the positive impact of the power cuts in East China and South China on the industry. The early gains were too high, and profit-taking was only an analysis of the 'potential'. As long as the fundamentals of the industry have not changed and the valuations have a margin of safety, we are happy to watch the follow-up valuation process of the industry.