At present, many paint companies have released the 2019 annual report and the 2020 Q1 financial report. The data shows that although the performance of Q1 in 2020 is greatly affected by the epidemic, the growth prospects of China's coating companies are still good under the background of increasing industry concentration and the replacement of foreign capital by domestic capital, including Sankeshu and Ashi Energy. Local brands raise their 2020 operating targets.
Local brands hold the basic plate
In recent years, the overall operation of China's coating industry has been stable. According to data from the China Coatings Industry Association, total industry output from 2015 to 2019 was 17.72 million, 18.12 million, 16.61 million, 23.77 million, and 24.38 million tons, with revenues of 412.3 billion, 397.5 billion, 306.4 billion, 315 billion, and 313.2 billion respectively. yuan. After experiencing the 2017 lows, the industry's output and revenue tend to recover from 2018 to 2019.
Through in-depth analysis of the relevant data, it is not difficult to find that the development trend of the coating industry in 2019 shows steady progress and good worries:
First, the business performance has improved, and imports and exports have been significantly hindered. Industry output increased 2.6% year-on-year, revenue decreased 0.6% year-on-year, and profit increased 9.4% year-on-year. Facing the complicated international situation and unclear trade disputes, both imports and exports fell. There were 236 loss-making enterprises, an increase of 1.7% year-on-year; the loss was 1.65 billion yuan, a year-on-year decrease of 21.3%.
Second, the industry concentration is still low, and the pace of integration development needs to be accelerated. From the perspective of total revenue distribution density, 1-100 people account for 42%, 101-200 people account for 15%, 201-500 people account for 21%, 510-1000 people account for 14%, and 1000 people account for 8%. From the point of view of the distribution density of total profits, the corresponding proportions are 55%, 15%, 18%, 9%, and 3%.
The third is that local brands have kept the basics, but the offensive is insufficient. There are 40 national brands in the "One Hundred Index", with Chinese-funded revenue accounting for 42.6% and 57.4% lost to foreign / joint ventures (42.2% vs 57.8% in 2018); Chinese-funded profits accounted for 43.8%, lost 56.2% of foreign / joint ventures (45.3% vs 54.7% in 2018).
In 2020, the new crown epidemic situation, environmental protection pressure and other factors will have a certain impact on the coatings industry. The relevant person in charge of the China Paint Industry Association predicts that China's paint industry will rebound significantly in the second half of the third quarter, the industry will strive to maintain stable development, and the overall revenue and output will strive to maintain the same level in 2019.
Some companies raise their 2020 operating targets
The echelon level of China's coating industry is obvious. The first echelon is multinational companies such as Nippon, AkzoNobel, etc., covering the entire range of coating products, and has a strong leading position in the field of special coatings and functional coatings. The second echelon is dominated by some local brand companies and has strong competitive advantages in certain sub-sectors. The third echelon is made up of many small businesses and is at a disadvantage.
From the latest situation, several local brands in the second echelon have good performance in 2019. Although the Q1 performance in 2020 will be significantly lower due to the lower operating rate in the first quarter of the industry and the impact of the new coronary pneumonia epidemic, overall, the industry is expected to After picking up, corporate performance will return to the rising track.
Taking Sankeshu as an example, the company's revenue in 2019 increased by 66.64% year-on-year, net profit increased by 82.55% year-on-year, and research and development expenses (130 million yuan) increased by 40.76% year-on-year. In the first quarter of 2020, revenue was 430 million yuan, a year-on-year decrease of 31%; a loss of 126 million yuan, a year-on-year increase of 124 million yuan. The company stated that it will move from product operation to industry and capital operation to form a vertically integrated and horizontally diversified ecological industrial chain investment holding company and become "the top ten global paint brands."
In addition, as a leader in architectural coating insulation, Astronix has also entered a period of rapid development. The company's revenue in 2019 increased by 45.89% year-on-year, net profit increased by 94.41% year-on-year, and research and development expenses (64.47 million yuan) increased by 36.70% year-on-year. The board of directors said that the renovation of old communities in the country has provided great opportunities for the paint industry. The company's 2020 revenue target is to increase by 30% to 50% year-on-year.
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