How high is the profit margin of the ceramic tiles industry?
With the official closing of the annual report of listed companies in 2017, all listed companies have handed over their own performance answers.
Let's look at two sets of simple data -
Known as the first line of the universe, ICBC has a total revenue of 726.502 billion yuan in 2017, a net profit of 286.049 billion yuan and a net profit margin of 39.37%.
Huawei, the most representative in the field of communications and mobile phones, achieved sales revenue of 603.6 billion yuan in 2017, net profit of 47.5 billion yuan, and net profit margin of 7.88%.
The two sets of data represent two different industries, one is the most profitable financial industry. In 2017, the top ten most profitable companies in more than 3,500 listed companies in Shanghai and Shenzhen, except Sinopec, the other nine are Banks, each with a net profit of more than 50 billion yuan; one is currently the most representative high-end advanced manufacturing industry, with the largest share of domestic mobile phone global market and many cutting-edge core technologies such as chips and 5G, each of which makes every Chinese quite Proud private enterprise.
Of course, if you look at an industry and make money, you must look at the total profit and the profit rate. The world's most profitable Apple company, its mobile phone business profit margin is about 30%, Samsung mobile phone is about 10%, while Huawei, Xiaomi and other domestic mobile phones are around 3%. 3%? You are not mistaken, the profit margin of domestic mobile phones is only about 3%. This level is not much higher than the bank's one-year deposit rate.
In fact, the home appliance industry has lower profit margins. Especially in the color TV industry, China is also the world's largest color TV production, consumption and exporting country. In 2017, the average profit rate of major enterprises in the color TV industry was around 1.3%. Several leading companies such as TCL, Haier and Hisense were slightly higher, but their net The profit margin is also between 2% and 4%. Only the US profit margin is slightly higher at 7%. Gree is a special case with a profit margin of 15%.
Similarly, as the mainstream automobile industry, whether it is foreign brands in China such as Volkswagen, Toyota, GM, or domestic brands such as BAIC, GAC, and Changan, their net profit margins are below 7%, although the income is slightly higher than bank financing, but Compared with the profit-making industries such as banks and real estate, the gap is still large.
Another outstanding representative of the manufacturing industry, Shanghai Zhenhua Heavy Industry Co., Ltd., is one of the world's largest heavy equipment manufacturers. Its global market share accounts for more than 80%. In 2017, its net profit was only 300 million yuan, and its net profit margin was 1.3%.
It can be seen that whether it is high-end manufacturing or traditional manufacturing, the average profit rate of the industry is far lower than that of finance and real estate.
In comparison, the profit rate of the ceramic industry is still decent. Take the 2017 annual report of the two listed ceramic tile companies as an example. Mona Lisa has a revenue of 2.89 billion yuan, a net profit of 301 million, and a profit margin of 10.42%. It received 2.40 billion yuan, net profit of 222 million yuan, and profit margin of 9.25%. The profit margins of the two companies are close to 10%, and the profit level is far higher than that of communications, home appliances, automobiles and other industries, and even far exceeds Huawei.
Due to the relatively scattered industry and high degree of privatization, the ceramic industry is relatively non-standard and opaque in its long-term business activities. Therefore, the profit levels of the above two companies do not represent the real profitability of the industry. It can be said with certainty that although Monalisa and Oceano are relatively first-line brands in the industry, they are certainly not the most profitable companies. Many companies in the industry have more profits and profit margins than the two. Enterprises, of course, there are more companies that cannot reach the level of these two companies. However, we can make a reference analysis of the industry's profit level through these two sets of public and real data.
On technology, innovation, and talents, the ceramic industry can hardly compare with the communications, mobile phones, home appliances and other industries. Whether it is the scale of funds, technical difficulty or technical iteration, the technology content of the ceramic industry is relatively low, after all, A traditional manufacturing industry, dealing with mud all day; on the market, marketing, competition, the ceramic industry is even less able to compare with the above-mentioned industries, whether it is the intensity of competition or marketing models, methods, channels, are relatively stable and traditional. Although the total profit of the ceramic industry is not as large as the above-mentioned industries, the industry's profit margin far exceeds these industries. Therefore, we should be glad that we can enter such an industry - the threshold is relatively low, the competition is not so intense, the return is still rich, and we can move every day.
In fact, there have been many elites who have been migrating from the field of home appliances to the ceramics industry for many years, and they don’t want to leave the industry after they come. The talents who have switched from the ceramics industry to the home appliance industry are extremely rare. This explains from another angle. The level of profitability of the two industries and the space for talent development.
However, while we are fortunate to be able to move bricks, we should also see the gaps in the industry and the existing crisis. We must find ways to expand the overall mass of the “cake” of the ceramics industry, and we must find ways to increase the average profit rate of the industry.
China Jianye has an annual output of about 10 billion square meters of ceramic tiles (10.15 billion square meters in 2017). The total industrial output value exceeds 500 billion yuan, and the average ex-factory price per square meter of ceramic tiles is about 50 yuan. In recent years, China's ceramic tile production has grown to the ceiling, and both domestic demand and exports have stabilized and declined. At the same time, with the increasing market competition, the average profit rate of the industry is also falling, and some enterprises are even on the verge of losses.
In the case that it is unable to increase profits through quantity growth and cost innovation, the whole industry can only increase the total profit and average profit rate of the industry through quality change and value innovation. Imagine if we can improve the added value of products through creativity, design and culture through product structure adjustment, and increase the ex-factory price per square meter of tiles by 10 yuan and 20 yuan, then the whole industry cake is not just 5000. Billion, and there may be 600 billion, 700 billion ... If so, the industry's profit margin will naturally rise.