Zhejiang Weixing New Building Materials Co., Ltd. (hereinafter referred to as "Weixing New Materials" or "the Company") announced on April 18 that the company held an investor reception day on April 16. At the event, Weixing New Materials revealed that in 2023, the company will achieve operating income of 6.378 billion yuan, a decrease of 8.27% over the same period of the previous year, although it has not completed the annual operating income target, it has maintained the resilience of performance, better controlled the operating risks and costs and expenses, and has good profit indicators: the total profit in 2023 will be 1.732 billion yuan, an increase of 12.82% over the same period of the previous year, and the net profit attributable to shareholders of listed companies will be 1.432 billion yuan, an increase of 10.40% over the same period of the previous year.
Screenshot of Weixing New Material's announcement
Weixing New Materials interpreted the company's 2023 annual results——
(1) External environment
1. Macroeconomic situation
2023 is the year of accelerated global economic divergence. The world economic recovery is sluggish, geopolitical conflicts are intensifying, and the international environment is becoming more complex and severe. While the domestic economy is developing in waves and zigzags, and recovering for the better, it is also facing insufficient effective demand, weak social expectations, and some cyclical and structural problems. The involution of the plastic pipe industry has intensified, and multiple factors such as downward pressure on real estate, insufficient consumption momentum, and local debt risk have continued to test the anti-risk ability, strategic determination and development resilience of enterprises.
2. Industry development
(1) Development status: In 2023, the total annual output of the domestic plastic pipe industry will be 16.19 million tons, a year-on-year decrease of 1.58%, and the overall development is relatively stable.
The overall situation: the growth rate of the industry has slowed down, the market is relatively stable, the industry concentration has been improved, the quality of enterprises has been improved, the level of intelligence has been improved, the market recognition has been improved, the awareness of environmental protection has been enhanced, and green production has been actively practiced.
There are deficiencies: unbalanced and insufficient development, there is room for improvement in product innovation, the level is uneven, the operating cost of enterprises continues to increase, the market competition is fierce, and the market of Party A and winning the bid at a low price restricts the benign development.
(2) Development trend: As a basic building material, plastic pipes have the attributes of environmental protection, energy saving and low carbon, and replacing steel with plastic is still a long-term development trend. New materials and new structural varieties are constantly emerging, various modified and composite plastic pipes are emerging, and the application fields continue to expand. The construction of new cities, urban renewal, rural revitalization, national water network construction, underground pipe network, flood control, drainage and disaster relief infrastructure construction, urban gas pipeline renovation, rural water circuit gas information and other infrastructure, new infrastructure, major project construction, water ecological governance, etc. will promote the popularization and application of plastic pipelines. Towards green environmental protection, high value-added and high quality, the service level has been continuously improved, and the development of the industrial chain has been continuously extended.
(3) Competitive landscape: The barriers to entry in the plastic pipe industry are not high, and it belongs to a fully competitive market. Enterprises that attach importance to brands and have excellent quality have a stronger ability to resist risks in adversity, while enterprises that pursue low quality and low prices generally have poor ability to resist risks, and the phenomenon of small and medium-sized enterprises suspending production, changing production and bankruptcy has increased significantly. The sales volume of the top 20 pipeline companies has reached more than 40% of the total number of the industry, and the concentration has been further improved.
(2) An overview of the company's operations
In the face of the severe external environment, the company continued to take "sustainable development" as the core, adhered to high-quality development unswervingly, closely followed the strategic goals, faced changes and difficulties, deeply cultivated the main business, strengthened the tackling of key problems, and promoted the effective implementation of the company's new round of strategic planning, maintaining a consistent trend of high-quality development. In 2023, the company will achieve operating income of 6.378 billion yuan, a decrease of 8.27% over the same period of last year, although it has not completed the annual operating income target, it has maintained the resilience of performance, better controlled operating risks, costs and expenses, and has good profit indicators: the total profit in 2023 will be 1.732 billion yuan, an increase of 12.82% over the same period of last year, and the net profit attributable to shareholders of listed companies will be 1.432 billion yuan, an increase of 10.40% over the same period of last year.
The company's key work in 2023 is as follows: 1. Deepen the retail industry, overcome difficulties, and achieve resilient development. 2. Strictly control the risks of engineering business, transform and improve quality, and achieve healthy development. 3. Continuous service upgrade and build new service advantages. 4. Steadily promote internationalization and healthy development of overseas business. 5. Strengthen scientific research and innovation, optimize IPD operation, and create new competitive advantages. 6. Deepen the functional positioning of industrial parks, drive by digital intelligence, and comprehensively improve the level of production guarantee. 7. Strengthen organizational reform, continue to empower, and forge organizational strength in actual combat. 8. Focusing on strategic goals, mergers and acquisitions help the company to transform rapidly.
Highlights and shortcomings of the company's 2023 annual report
The highlights of this annual report are mainly in five aspects: first, in the economic downturn and fierce competition in the industry, the company's retail business still maintains strong resilience and improves quarter by quarter; second, the company's engineering business has improved its quality and transformation is relatively good, and the quality of operation has been greatly improved; third, the gross profit margin of the company's main business has increased by more than four points, and the basic stability of the price system has been maintained in the market environment of fierce price competition; fourth, 2024 is a very challenging year, and the company has put forward higher requirements for the goals of the new year; fifth, it has actively responded to the suggestions of investors and the call of the regulatory authorities, further improve the level of cash dividends, and put forward a medium-term cash dividend plan to sincerely return investors.
Of course, the company also has shortcomings such as unfulfilled annual sales targets and insufficient implementation of strategic planning, which need to be improved and perfected in the new year.
(3) The company's development plan for 2024
Development strategy: In 2024, the company will continue to take "sustainable development" as the core, adhere to high-quality development unswervingly, market-oriented, customer-centric, focus on key points, and focus on effective implementation of strategic planning and rapid development.
Key tasks: 1. Focus on key points and comprehensively improve market share. 2. Adhere to the "risk control first" and do a good job in the quality improvement and transformation of engineering business. 3. Promote internationalization in an orderly manner and expand new business opportunities. 4. Closely follow the company's strategy and do a good job in the implementation of eight safeguard measures.
Goal: In 2024, the company's operating income target will strive to reach 7.3 billion yuan, and the cost and expenses will strive to control about 5.7 billion yuan.
In the investor interactive exchange activities, Weixing New Materials answered the relevant questions of investors. Some investors asked, the reason for the company's increase in the dividend rate in 2023? Weixing New Materials replied: The company's cash dividend ratio has been relatively high, and the increase in the dividend rate in 2023 and the proposed medium-term dividend plan for 2024 mainly have the following considerations: first, the capital market will be relatively sluggish in 2023, and investors will have more dividend demands, and the company hopes to increase the return to investors by increasing the dividend ratio; Third, the company has maintained good profitability in 2023, with relatively abundant cash flow, and has no particularly large capital expenditure plan so far.
Talking about how to split the revenue growth target in 2024 and how to complete it, Weixing said that the company's operating income target in 2024 is 7.3 billion yuan, with a synchronous growth of about 1 billion yuan, deducting the contribution of Zhejiang Kerui and other consolidations, the original business growth target is about 10%. At present, the external environment is indeed difficult, and the challenges and pressures faced by the company are indeed greater, and the company needs to make greater efforts to overcome difficulties and promote the company's sustainable and high-quality development.
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Reviewer: Wang Bei