Anhui Conch's Margins to Gradually Improve With Secular Cement Demand Recovery

With annual cement production capacity of 395 million metric tons in 2023, Anhui Conch Cement is one of the largest cement producers in the world. Closely tied to infrastructure and real estate construction, China’s cement industry is challenged by the shift toward a less construction-intensive economy. However, we believe Conch's strong balance sheet (net cash as of the end of 2023) and best-in-class mining assets position it best to weather slowing investment in China and achieve modest market share gains at the expense of overleveraged competitors.