On April 25, Zheshang Zhongtuo, a leading listed company in the domestic bulk commodity means supply chain, disclosed its 2023 annual report. In 2023, the company achieved operating income of RMB203.065 billion, up 4.89% year-on-year, total profit of RMB1.514 billion, down 11.99% year-on-year, net profit attributable to shareholders of listed companies of RMB711 million, down 29.05% year-on-year, gross profit margin of 1.59%, up 0.17 percentage points year-on-year, and net profit margin of 0.57%, down 0.09 percentage points year-on-year. In terms of products, the gross profit margins of industrial materials, construction materials, and ores in 2023 will be 1.50%, 1.76%, and 2.41% respectively.
During the reporting period, the physical volume of Zheshang Zhongtuo's black industry chain business was 83.59 million tons, and the operating income was 156.2 billion yuan, an increase of 16.7% and 2.38% year-on-year respectively. Among them, the physical volume of steel was 28.34 million tons, a year-on-year increase of 27.29%, the physical volume of iron ore business was 33.01 million tons, a year-on-year increase of 0.35%, and the physical volume of coal business was 13.83 million tons, a year-on-year increase of 48.8%. The operating scale and market share of the black industry chain have been further improved.
1. Business model
Zheshang Zhongtuo's core business is supply chain integration services for industrial customers, and it has been shortlisted in the Fortune China 500 list for 14 consecutive years, ranking 69th in 2023. At present, Zheshang Zhongtuo's business categories have covered dozens of subdivisions of the industrial chain such as traditional bulk commodities, new energy, renewable resources, etc., and its business network covers the Yangtze River Delta, Pearl River Delta, Bohai Rim, Central and Western China and other major regions of the country, with a total of 66 wholly-owned/holding subsidiaries, and 5 international platform subsidiaries in Hong Kong, Singapore, Indonesia and Thailand, covering 71 countries and regions such as ASEAN, South America and Africa, including 30 countries and 9 ASEAN countries. Its main business models are as follows:
1. Distribution mode
Relying on its own resource channel advantages, Zheshang Zhongtuo gives full play to the service capabilities of procurement and marketing, warehousing, transportation, processing, etc., and provides customers with "door-to-door" one-stop integrated services, which are divided into two types: engineering distribution and industrial distribution.
The project distribution mode mainly serves the capital construction customers, focusing on the characteristics of difficult material procurement, large amount of project funds, high timeliness of distribution, and high requirements for supply, quality and quantity assurance, etc., and gives full play to its own resource advantages in steel, cement and other building materials, and provides mature and complete integrated service solutions for the distribution of engineering materials for industry customers.
Industrial distribution and distribution mainly serves manufacturing customers, according to the raw material needs of customers in the production process, makes full use of their own professional advantages and the upstream resource network precipitated by the industry to provide supply chain services, reduce supply chain management costs, and meet the diversified and personalized supply chain management needs of manufacturing enterprises.
2. Warehouse supply and distribution model
Make full use of upstream resources and financial strength, purchase bulk inventory and distribute it to the downstream to help customers reduce supply chain costs, including two modes: one is to collect customer purchase intentions, centralized procurement and targeted sales to downstream customers, and the other is to carry out inventory distribution based on its own warehousing outlets, strictly manage positions, hedge through the derivatives market, prevent price risks, and obtain stable income.
3. Factory-warehouse supply chain model
Customized service model developed to meet the individual needs of manufacturing enterprises of a certain scale. Under this model, Zheshang Zhongtuo is deeply involved in the customer's production process, sets up a self-managed warehouse in its production area, and provides one-stop integrated services including raw material procurement, finished product sales, inventory management, logistics finance, hedging, production management, management consulting, etc., so as to empower customers to reduce costs and increase efficiency, and enhance competitiveness. At present, mature projects have been implemented in Shanxi, Zhejiang, Jiangsu and other regions.
4. Logistics financial model
Logistics finance is based on the supply chain integration service and risk management and control capabilities, give full play to its advantages of digital sky network and logistics ground network, by providing goods pledge supervision, price marking, market channels and other services, act as a risk control intermediary between banks and other financial institutions and manufacturing enterprises, revitalize the inventory value of raw materials, semi-finished products, finished products and other inventory for manufacturing enterprises, help financial institutions serve the real economy, benefit small and medium-sized enterprises, and solve the problems of difficult financing, expensive financing and troublesome financing.
5. "Trade + Base + Platform" model
This model is mainly applied to the renewable resources industry chain, while the transaction business is steadily promoted, it fully integrates upstream resources, deeply binds end customers, invests in physical bases to gather traffic, and builds a model integrating acquisition, finance, processing, distribution and sales. Zheshang Zhongtuo has carried out the layout of recycled steel raw materials, recycled stainless steel, recycled aluminum, recycled PET and other varieties.
6. Industrial chain integration service model
On the basis of supply chain services to meet the needs of core customers in the industry, we continue to extend to the upstream and downstream enterprises of customers, strengthen the stickiness with industrial chain enterprises through equity cooperation in the process, and obtain stable supply chain service income and industrial chain value-added income by relying on the two-wheel drive of business and investment. At present, this model is mainly applied to the new energy business of Zheshang Zhongtuo, which has provided supply chain services for many leading enterprises in the photovoltaic and energy storage industry chains, and extended to the upstream and downstream industrial chains with this as the center.
Taking the photovoltaic industry chain as an example, Zheshang Zhongtuo has completed the top-down business layout from silicon materials, silicon wafers, cells, modules, brackets to photovoltaic power stations. Provide supply chain services such as raw material procurement, inventory management, logistics and distribution, processing services, industrial finance, market information and other supply chain services for production-oriented enterprise customers in the industrial chain, and provide customers with photovoltaic EPC and operation and maintenance services.
7. Virtual factory mode
The virtual factory is an upgraded version of the "integration of trade and industry" of Zheshang Zhongtuo, which relies on the advantages of brand, capital and channels to lock all or part of the production capacity of manufacturing enterprises, grasp the right to raw materials and finished products, realize the integrated development of supply chain services and manufacturing, and enhance the ability of supply chain integration services. This model effectively improves the efficiency of resource utilization, meets the processing needs of customers at a relatively low cost, and enhances the overall competitiveness of the industrial chain. Under this model, Zheshang Zhongtuo strengthens the stickiness of customer cooperation by cooperating with manufacturing enterprises, and at the same time obtains processing profits. At present, the virtual factory has been applied to the fields of black, chemical and new energy.
Second, the main source of profit
Based on the characteristics of the industry and its own resources and advantages, in the process of providing supply chain integration services, Zheshang Zhongtuo has four main sources of profit: industrial finance, basis trade, value-added services, and industrial investment.
Industrial finance: First, based on the credit environment and the capital-intensive characteristics of the industry, relying on the advantages of the brand and platform, to provide supply chain financial services for upstream and downstream customers to obtain benefits;
Basis trade: Relying on the systematic ability of research, risk control, intelligence and trading, we give full play to the price discovery function of the financial market, and stabilize the price risk through the combination of futures and spots.
Value-added services: Provide customers with warehousing, transportation, processing, production management, information management, management consulting and other services to obtain value-added service benefits.
Industrial investment: In the process of providing supply chain services for upstream and downstream customers in the industrial chain, we will explore valuable investment opportunities, strengthen business rights through equity, realize the benign interaction between "equity" and "business rights", and obtain appropriate investment returns.
Third, the company's business plan
2024 is a critical year for the implementation of the "14th Five-Year Plan", focusing on the goal of striving to be a world-class enterprise, adhering to the general tone of seeking progress while maintaining stability, and coordinating various tasks such as transformation and upgrading, reform and innovation, management improvement, and international expansion, so as to promote the company's high-quality development to a new level. The key tasks for 2024 are as follows:
1. Do excellent and fine stock business. Strengthen the research and judgment of macro and industrial trends, give full play to its differentiated competitive advantages, promote the expansion of black business such as engineering materials, strip and mineral resources to new regions, new varieties, new models and new customer groups, consolidate the basic plate of development, explore business growth opportunities in the industrial chain of nonferrous metals, energy, chemical industry, etc., improve economies of scale through multi-category operations, stabilize the impact of industry cycles, and improve profit stability.
2. Accelerate the expansion of green and low-carbon tracks. We will continue to increase the expansion of low-carbon and green fields such as new energy and renewable resources. In terms of new energy, focusing on the two industrial chains of "photovoltaic" and "energy storage", we will continue to explore the application of new energy in multiple scenarios with supply chain integration services as the ecological cornerstone, and occupy an ecological niche conducive to business development. In terms of renewable resources, we will adhere to the "trade + base + platform" model, strengthen price management and the construction of recycling channels, accelerate the expansion of new varieties, and build a multi-variety and multi-format renewable resources development pattern.
3. Accelerate the implementation of the globalization strategy. The "going out" strategy is the key work of Zheshang Zhongtuo in 2024. The first is to complete the formulation of the globalization strategy, and clarify the direction, path, resources, capabilities and organizational guarantees of globalization development. The second is to fully integrate into the new pattern of domestic and international dual-cycle development, strengthen the construction of overseas outlets, overseas market expansion and international supply chain service capabilities, and continue to increase the proportion of international business.
4. Solidly promote the integration of trade and industry. The first is to do a good job in the production management and operation quality improvement of the existing investment projects such as Zhongtuo New Materials, Zhongtuo Xineng, and Fengnan Industrial Service Complex, and build a model factory. The second is to focus on asset-light operation and accelerate the implementation of virtual factory projects. The third is to choose the opportunity to lay out logistics bases, port terminals, processing bases, etc. with card position advantages to enhance the company's overall competitive advantage.
5. Continuously strengthen refined management. The first is to normalize the "four optimizations" of assets, business, personnel, and governance structure, strengthen the sorting and optimization of business models, increase the cleanup of inefficient and ineffective businesses, promote organizational structure reform, and ensure the optimal allocation and maximum utilization of limited resources. The second is to improve the price management ability, improve the market research system, strengthen the research and judgment of price trends and price management tools, improve the futures and spot linkage mechanism, and promote the steady development of the company's business.
6. Continue to improve the risk management and control system. The first is to improve the risk management and control system of "full staff, comprehensive, full process and whole system", dynamically adjust and optimize relevant system processes, embed risk control requirements into the whole process and all links of the business, and improve risk identification capabilities, risk response capabilities and risk disposal efficiency. The second is to strengthen customer management. Attaches great importance to customer selection and cooperation mode selection, strictly designs business models that match customer strength, credit, development stage, and actual needs, improves the risk early warning mechanism for industry customers, and timely adjusts and optimizes response measures according to changes in customer conditions, so as to effectively prevent the occurrence of various risks. The third is to strengthen the management of cargo rights. Intensify the inspection of the "four noes and two straights" in the warehouse, and do a good job in key actions such as document handover, transfer of cargo rights, warehouse management, and daily inventory to ensure the safety of cargo rights.
Information reference: Zheshang Zhongtuo, etc.
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