Since 2023, despite the multiple challenges faced by the macroeconomic recovery process, and the overall pressure on the home improvement and real estate markets, which has dragged down a number of ceramic and sanitary ware companies to encounter the dilemma of slowing revenue growth and declining profit margins, there are still leading enterprises that have delivered more than expected answers.
Looking ahead, with the acceleration of real estate bottom repair, the building ceramics industry is also expected to usher in a boost in market confidence. In the medium and long term, there is a lot of room for improvement in industry concentration, and in the future, as the performance and valuation of related companies gradually return to the right track, leading companies with stable fundamentals and headwinds in the trough period are expected to have greater growth elasticity.
When the "reshuffle" of the ceramic industry is carried out, the value of the faucet configuration is highlighted
At present, after more than 30 years of development, the domestic ceramic industry has entered the era of stock competition, and the Matthew effect of "the strong is always strong" is highlighted. The so-called "big waves of sand to see gold", in the increasingly fierce competition, environmental protection policies under the increasingly severe situation, the mainland building ceramics industry will be further concentrated in the head enterprises.
To analyze the strengths and weaknesses of each leading company, financial performance is the most intuitive indicator. Horizontal comparison of five listed architectural ceramics companies, Marco Polo's revenue scale ranks first all year round, with a rapid increase in revenue from 8.1 billion yuan in 2019 to 8.925 billion yuan in 2023;
In terms of the net profit index attributable to the parent company, affected by the downstream real estate prosperity, various enterprises have different degrees of fluctuations. However, in 2023, Marco Polo will record a net profit of 1.353 billion yuan, and the profitability level is relatively good.
According to Zhitong Financial APP, in recent years, the market demand for glazed bricks has continued to explode, with the annual production capacity increasing from 1.009 billion square meters in 2014 to 4.575 billion square meters in 2022, and the production capacity of glazed bricks will account for more than 36% of the total production capacity of all ceramic tiles by 2022.
From 2021 to 2023, the company will keep up with the market consumption trend, and the proportion of glazed brick revenue will increase year by year, respectively 94.79%, 96.30% and 96.70%, driving the rapid growth of the company's performance.
In terms of sales model, in 2023, the company will further develop distribution channels, with a gross profit margin of 41.02% for the distribution model, a gross profit margin of 29.35% for the direct sales model, and a gross profit margin of 36.01% for the overall main business, which is in the forefront of the industry.
(Picture from Marco Polo prospectus)
As the saying goes, "performance is the best touchstone", as the stock competition situation of the building ceramics industry continues to advance, the industry head enterprises with excellent fundamental performance will undoubtedly have higher growth and long-term allocation value.
"Low carbon + innovation" interprets the new quality and new sample of productivity in the building ceramics industry
By 2024, the "green and low-carbon" and "scientific and technological innovation" required by the new quality productivity will not only put forward higher requirements for manufacturing enterprises, but will also become a new driving force to promote the high-quality development of enterprises. Under the dual pressure of policy orientation and iterative upgrading of the consumer side, the long-term trend of the development of the building ceramics industry to "high-end, green, intelligent and branded" has been established.
In June 2023, the China Light Industry Federation issued a notice on the issuance of the "Implementation Plan for Carbon Peaking in Key Areas of Light Industry", proposing to promote coal reduction and substitution, further reduce the proportion of coal energy in the ceramic industry, and gradually increase the proportion of natural gas and electric energy; Accelerate the exit of inefficient production capacity, gradually resolve the excess capacity of ceramics and other industries, accelerate the elimination of backward production methods, encourage mergers and acquisitions of enterprises, and prevent low-level duplicate construction.
Since the beginning of this year, the Department of Ecology and Environment of many provinces and cities and the Provincial Market Supervision and Administration Bureau have successively issued the "Emission Standards for Air Pollutants in the Ceramic Industry", proposing to further reduce the emission of air pollutants in the ceramic industry and improve the quality of the atmospheric environment. It is conceivable that in the future, the regulatory requirements for environmental protection control will be more stringent.
From the perspective of market competition, as the national policy in safety, environmental protection, energy consumption, carbon emissions, intelligence and other aspects continue to put forward high-quality development requirements to enterprises, a large number of backward production capacity pottery enterprises or will accelerate the elimination of the industry, the market, with financial advantages and technical strength of the head pottery enterprises are expected to occupy more market share.
Gong Wei, Secretary-General of China Building and Sanitary Ceramics Association, also pointed out that in the next three years, the pattern of the entire industry will undergo major changes, and listed companies and head enterprises with deep roots and high brand added value, as well as specialized and special new enterprises with leading technical strength and taking differentiated routes have higher growth space.
In recent years, Marco Polo has attached great importance to R&D innovation, and from 2021 to 2023, the amount of R&D investment will be 323 million yuan, 298 million yuan and 315 million yuan respectively, ranking at the forefront of the industry.
In terms of green and low-carbon transformation and upgrading, Marco Polo actively promotes energy conservation and emission reduction in the whole production process, not only building the industry's largest operating distributed photovoltaic power station in the production base, but also exploring and developing a number of green and low-carbon technologies, including new energy-saving continuous ball milling and crushing technology, central control integrated high-efficiency spray powder technology, etc.
Optimize the layout of regional production capacity and brew growth potential of new products
Recently, with the Shanghai and Shenzhen Stock Exchanges officially released the revised "Stock Listing Rules", "Stock Issuance and Listing Review Rules" and other business rules, Marco Polo, the leading building ceramics company, will also become one of the first companies to meet after the release of the new regulations, marking the company is one step closer to the official listing.
According to Zhitong Financial APP, Marco Polo plans to raise 3.158 billion yuan this time, which will be used for 6 projects, covering intelligent ceramic furniture industrial parks, special high-performance ceramic plates, and green intelligent manufacturing upgrading and transformation of production lines.
Specifically, in order to comply with the higher requirements of the national policy for energy conservation and emission reduction in the manufacturing industry, Marco Polo will intelligently upgrade some of the existing production equipment of its ceramic production lines to achieve energy saving and consumption reduction, and at the same time upgrade the automatic process quality detection system, build a digital workshop in an all-round way, improve production efficiency, and accelerate the construction of a green and smart park.
Special ceramic products are widely used in lithium battery, semiconductor, photovoltaic, energy conservation and environmental protection, metallurgy, thermoelectric and other industrial civil fields and protective equipment fields, with the country vigorously promoting the development of new materials, the special ceramic industry also shows a new trend of localization and high-end.
Compared with the existing ceramic slabs and rock slabs on the market, the special high-performance ceramic plates to be produced by Marco Polo have a series of excellent properties such as high strength, high hardness, high toughness, corrosion resistance, etc., and can also achieve antibacterial, antistatic, anti-slip and other functions, and the application scenarios are more diversified; By adopting the industry's leading intelligent flexible customized production system, this kind of ceramic plate can also be personalized customized, which will become an important step for the company to enter the high-end customization market.
In addition, in order to further optimize the regional production capacity layout, the company plans to invest 674 million yuan in Fengcheng, Jiangxi Province to build a smart ceramic home industrial park (phase I), the construction period is expected to be 3 years, and the project will add 10 million square meters of building ceramic product production capacity after completion.
Up to now, Marco Polo has five production bases in Dongguan, Guangdong, Qingyuan, Fengcheng, Jiangxi, Rongchang, Chongqing and Tennessee. Among them, Jiangxi Fengcheng is known as the "granary of the coal sea", with rich coal resources and forest resources, and is located in the junction of China's Yangtze River Economic Belt and the development axis along the South Beijing Nine Route, good location and transportation conditions will effectively reduce the production and transportation costs of enterprises.
Fengcheng, Jiangxi Province is one of the earliest birthplaces of celadon ware in China, and its ceramic manufacturing history is more than 1,000 years earlier than the formation of Jingdezhen, the "porcelain capital", and the Hongzhou kiln in this place is also one of the six famous celadon kilns in the Tang Dynasty. It is estimated that the total reserves of porcelain clay used as the main raw material for pottery in Fengcheng can reach 60 million tons.
After the completion of the intelligent ceramic home furnishing industrial park, Marco Polo's production capacity layout in Fengcheng, Jiangxi Province will be further expanded, and the product structure will be more abundant, adding upward momentum to the follow-up performance.
As a leader in the building ceramics industry, such as Marco Polo and other enterprises in research and development, production, brand, channels and other aspects of full flowering, with the listing of broadening financing channels and improving brand awareness, will be expected to open a new cycle of value growth.