Guang Dong Sitong Group (603838.SH) released its 2024 performance report: revenue increased significantly, performance improved. What are the highlights for the future?

Guang Dong Sitong Group Guang Dong Sitong Group Guang Dong Sitong Group2024With the release of the 2024 performance report, Guang Dong Sitong Group (603838.SH) achieved a total operating income of 285,238.6 million yuan for the year, an increase of 53.52% compared to the same period last year, demonstrating strong revenue growth. Although the net profit attributable to shareholders of the listed company was still -23.0359 million yuan, a decrease of 38.35% compared to the previous year, the performance showed significant improvement. The significant increase in revenue and the remarkable reduction in CKH HOLDINGS losses have attracted high attention in the current competitive market environment, and have also sparked market interest in the reasons behind its growth and future development direction. Business growth path: Dual drive of endogenous and exogenous growth 1. Endogenous growth: Revitalizing traditional core business In the traditional home life ceramic plate sector, Guang Dong Sitong Group achieved steady growth through a series of strategic initiatives, stabilizing the business base. Guang Dong Sitong Group actively participated in domestic and foreign renowned exhibitions such as the Canton Fair, Frankfurt Exhibition, and Dubai BIG5 Exhibition, fully showcasing its product advantages and capturing market demand trends. Through these exhibitions, the company established connections with many international clients, effectively expanding overseas markets, resulting in a significant increase in overseas orders. At the same time, by increasing the development efforts for bulk business of corporate clients, Guang Dong Sitong Group successfully cooperated with many large enterprises by providing customized ceramic products with high quality and diversity, further increasing sales. In the expansion of aviation ceramic business, Guang Dong Sitong Group also made positive progress. With exquisite craftsmanship and strict quality control, the company has won recognition from multiple airlines, providing airline-specific ceramic tableware products and establishing a good brand image in the aviation sector. In terms of specific data, in 2024, revenue from daily ceramics reached 130.0265 million yuan, a year-on-year increase of 30.64%; revenue from sanitary ceramics was 68.3851 million yuan, a year-on-year increase of 14.58%; revenue from art ceramics was 39.9456 million yuan, a year-on-year increase of 78.95%. These growth figures fully demonstrate its deep heritage and strong market competitiveness in the traditional core business field. 2. Exogenous development: New material business as a new engine In order to seek new business growth points, Guang Dong Sitong Group decisively expanded into the upstream new material business field in the second half of 2024, introducing zirconium titanium ore refining business. This business mainly imports zirconium titanium ores from the United States, Australia, Indonesia, and other countries, and uses comprehensive technical equipment and processes such as wet magnetic separation, dry magnetic separation, reselection, electroselection, dehydration, and drying to sort and refine zirconium titanium ores, producing a variety of refined products such as titanium concentrates, zirconium sand, and hematite. These products are widely used in precision casting, cast steel coatings, refractory materials, various ceramics, and other industries with strong market demand. The zirconium titanium ore refining business launched in the second half of 2024 achieved operating income of 39.7592 million yuan in the same year. With the continuous advancement of the business, the continuous maturity of the technological processes, and the accumulation of customer resources, this business is expected to achieve greater breakthroughs in the future, bringing more generous profits to the company, helping the company establish a foothold in the field of new materials and achieve diversified development. Cost reduction and efficiency improvement: Multi-dimensional optimization of cost structure 1. Production process: Technological transformation and process optimization In the production process, Guang Dong Sitong Group actively carries out production line and process technological transformations to reduce energy consumption and material costs. Investing a large amount of resources, upgrading and replacing production equipment, and introducing advanced automated production equipment to improve production efficiency and product quality stability. At the same time, by continuously researching and developing technology for recycling materials, the company recycles waste generated during the production process, reducing the cost of raw material procurement and lowering waste emissions, achieving efficient use of resources and environmentally-friendly protection. In terms of process technology transformation, through in-depth research and analysis of the production process, the company optimized the parameters and operating methods of each production link, making the production process smoother and more efficient. For example, in the ceramic firing process, by improving the structure and combustion methods of kilns, energy utilization has been increased, and energy consumption during firing has been reduced, resulting in a significant decrease in energy costs per unit product. In the raw material processing process, new material processing technologies have been developed, increasing the utilization rate of materials and reducing costs incurred due to material wastage. 2. Operations management: Fine management and cost control At the operational management level, Guang Dong Sitong Group has implemented fine management, establishing standardized operating procedures and rigorously controlling expenses in various aspects such as procurement, offices, and travel. In addition, by actively revitalizing existing assets and disposing of idle assets reasonably, the company has increased the efficiency and return on assets. By optimizing asset allocation and directing assets to more promising business areas, the company has maintained and increased the value of its assets. While controlling costs, the company focuses on improving operational efficiency, achieving information sharing and collaborative work between departments through informatization, reducing communication costs and work delays, and improving overall operational efficiency. Outlook for 2025: Confident and Striving for Excellence Looking forward to 2025, Guang Dong Sitong Group is confident in achieving its goal and has formulated a series of effective strategies. 1. Market expansion: Dual focus on domestic and international markets In terms of market expansion, Guang Dong Sitong Group plans to increase marketing investment further and actively explore new markets and customers in the core business of home life ceramics. In terms of export business, the company will continue to actively participate in international renowned exhibitions such as the Canton Fair, Frankfurt Exhibition, and Dubai BIG5 Exhibition, deepening its understanding of international market demands and trends, and establishing cooperation relationships with more overseas customers. At the same time, the company will continue to strengthen the development of business in supermarkets and e-commerce platforms, enhancing brand awareness and market share in the domestic market. 2. Product innovation: Focus on technological research and brand building In terms of product innovation, Guang Dong Sitong Group will continue to increase investment in product research and technological innovation, continuously improve product quality and brand competitiveness. By introducing advanced production technology and equipment, the company will continuously improve product quality and manufacturing processes to meet consumer demand for high-quality products. At the same time, the company will strengthen brand building and market promotion, increasing brand awareness and reputation, creating an internationally competitive brand image. 3. Cost control: Fine management, efficiency improvement In terms of cost control, Guang Dong Sitong Group will continue to implement fine management, continuously optimize cost structures, and improve operational efficiency. Through technological transformation and process optimization, the company will reduce production costs and energy consumption, achieving cost reduction and efficiency improvement. At the same time, through fine management and cost control, the company will improve asset utilization efficiency, reduce financial risks, and ensure the company's steady development. Overall, Guang Dong Sitong Group achieved significant performance improvement in 2024, demonstrating strong growth momentum. In the future, the company will continue to adhere to the dual drive of endogenous and exogenous growth development strategy, increase market expansion and product innovation efforts, optimize cost structures, strive for excellence, and achieve better performance.Expansion work for major clients and airline clients, by providing personalized product solutions and high-quality services, meeting the diverse needs of customers, consolidating and expanding market share in these areas.In the domestic market, Guang Dong Sitong Group will continue to increase its efforts in developing bulk purchasing business for chain supermarkets, hotels, and corporate clients. By establishing long-term stable relationships with chain supermarkets, expanding the distribution range of products, and increasing the exposure of products in the market; providing customized ceramic products for hotel clients to meet their unique requirements and enhance the hotel's brand image; winning more orders for bulk purchasing business from corporate clients with high-quality products and price advantages. In addition, efforts will be made to increase the development of new products, explore sales channels for gift ceramics and souvenirs, meet the needs of different consumers through innovative product design and marketing strategies, and further expand the domestic market. Cost Control: Continuing to Deepen Cost Reduction Strategies In terms of cost control, Guang Dong Sitong Group aims to reduce costs, improve quality, and increase efficiency through various measures to control expenses and costs. In terms of procurement management, the company will further optimize the procurement process, strengthen cooperation with suppliers, strive for more favorable procurement prices and payment terms through centralized procurement and long-term cooperation agreements. At the same time, continuously improve the supplier evaluation system, regularly evaluate suppliers' product quality, delivery time, prices, etc., eliminate unqualified suppliers, and ensure the stability and efficiency of the supply chain. In terms of production cost control, continuously optimize production processes, introduce advanced production technologies and equipment, increase the level of production automation, reduce labor costs and production waste. By streamlining personnel allocation, properly arranging employees' work positions, improving work efficiency, and achieving optimal allocation of human resources. In asset management, continue to actively utilize existing assets, reasonably dispose of idle assets, improve asset utilization efficiency and return on investment. By optimizing asset allocation, invest assets in more promising business areas to preserve and increase asset value. New Business Development: Breakthrough in New Material Business As the refinement business of zirconium titanium ore products continues to advance, technological processes mature, and clients are continually explored, this business is expected to achieve greater breakthroughs by 2025. Efforts will be made to increase investment in this business, introduce advanced production equipment and technical talents, improve production efficiency and product quality. By optimizing production processes, reducing production costs, and enhancing the market competitiveness of products. At the same time, actively expand customer resources, establish cooperation relationships with more downstream enterprises, increase the market share of products, achieve rapid revenue growth and sustained profitability, and provide strong support for the company's growth. Summary and Outlook: Bright Prospects, Challenges Remain Looking back at 2024, Guang Dong Sitong Group achieved a significant increase in revenue and a significant reduction in losses through the dual-drive of endogenous growth and outbound development. Cost reduction and efficiency measures have also achieved phased results. In 2025, the company has formulated a comprehensive and targeted development strategy, actively deploying in market expansion, cost control, and new business development, demonstrating strong development determination and confidence. However, the company also faces many challenges. Market competition remains fierce, the competitive landscape of the ceramic industry is highly fragmented, and some small and medium-sized enterprises face survival pressure. Guang Dong Sitong Group needs to continuously enhance product competitiveness and brand influence to cope with competitive pressure from peers. Industry technology continues to innovate, new ceramic materials and production processes continue to emerge, and only by keeping up with technological development trends can a leading position be maintained in the market. In addition, factors such as uncertainties in the macroeconomic environment and fluctuations in raw material prices may also affect its operating performance. In the future, Guang Dong Sitong Group needs to deepen its strategic layout and strengthen its core competitiveness. On the basis of consolidating the advantages of traditional main business, accelerate the expansion of new material business to achieve diversified development. At the same time, continuously optimize internal management, promote cost reduction and efficiency improvement, enhance operational efficiency and profitability. Only in this way can sustainable development be achieved in a complex and changing market environment, create greater value for shareholders, steadily move forward in the wave of development, achieve the goal of graduation, and move towards a new development stage.