Company Reports

Anhui Conch Cement's revenue and operating profit declined 11% and 51% year-on-year, respectively, in the first half of 2026, amid a 14% drop in cement selling prices. The interim dividend was reduced to CNY 0.13 per share from CNY 0.24 in 2025.

With annual cement production capacity of over 400 million metric tons in 2025, 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 2025) and best-in-class mining assets position it to weather slowing investment in China and achieve modest market share gains at the expense of overleveraged competitors.

With annual cement production capacity of over 400 million metric tons in 2025, 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 2025) and best-in-class mining assets position it to weather slowing investment in China and achieve modest market share gains at the expense of overleveraged competitors.

Anhui Conch Cement's first-quarter revenue and operating profit declined by 10% and 19% year on year, respectively, due to weaker cement selling prices, higher coal costs, and operating deleverage. Operating margin deteriorated to 10.2% from 11.4% a year earlier.

With annual cement production capacity of over 400 million metric tons in 2025, 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 2025) and best-in-class mining assets position it to weather slowing investment in China and achieve modest market share gains at the expense of overleveraged competitors.

Anhui Conch Cement posted a 9% year-on-year decline in revenue and a 5% year-on-year increase in adjusted net profit in 2025. Despite deterioration in cement sales volume and selling prices, net margin rose to 10.3% from 8.8% in 2024, driven by easing coal and energy costs.

According to the National Bureau of Statistics, China's cement production volume decreased by 7% in 2025 amid subdued infrastructure and property investment activity. The cement price index also fell by 21% during 2025, as per ccement.com.

With annual cement production capacity of over 400 million metric tons in 2024, 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 2024) 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.

Anhui Conch Cement posted an 11% year-on-year decline in revenue for the third quarter of 2025. However, net profit rose 3%, driven by improved profitability in the cement business, as gross margin rose to 25.0% from 22.8% for the same period last year.

With annual cement production capacity of over 400 million metric tons in 2024, 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 2024) 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.

Anhui Conch Cement saw mixed results for the first half of 2025, with revenue down 9% but operating profit up 29% year on year. Accordingly, operating margin rose to 14.9% from 10.4% for the same period last year.

With annual cement production capacity of over 400 million metric tons in 2024, 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 2024) 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.

Anhui Conch Cement and China Resources Building Materials experienced top-line contraction but margin improvement in the first quarter of 2025 compared with a year earlier. Both firms achieved net profits for the quarter, mainly due to higher cement prices and lower raw material costs.

Anhui Conch Cement posted disappointing 2024 results, with revenue and net profit down by 36% and 25% year on year, respectively. This mainly comes from weak demand for self-produced cement products, which saw a 5% decline in sales volume and an 11% contraction in average selling price.

With annual cement production capacity of over 400 million metric tons in 2024, 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 2024) 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.

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.

China's National Bureau of Statistics, or NBS, disclosed that domestic cement production volume declined by 9.5% year on year in 2024. In addition, the average cement price in China dropped by 2.6% year on year in 2024, per dcement.com.

We transfer coverage of Anhui Conch Cement with our fair value estimate maintained at HKD 26.0 per H-share (CNY 23.9 per A-share). That said, we revise our moat rating down to none from narrow given structural changes in China’s cement industry. We expect overcapacity of clinker and cement production to pose lingering pressure on selling prices, which will weigh on manufacturers’ margins. Although we think property and infrastructure demand should gradually stabilize, the sector should deliver lower profitability compared with the upcycle prior to 2022. While Conch’s unit production cost advantage could partly offset subdued pricing, we think the company’s excess return on invested capital will remain muted, leading to our no-moat rating.

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.

Anhui Conch Cement’s 48% year-on-year decline in first-half net profit to CNY 3.49 billion is disappointing, mainly due to a lower average selling price and weak cement demand. However, we think Conch still outperformed its peers given that the industry was loss-making during the period, according to Digital Cement. While we still expect second-half results to improve sequentially, we have toned down our forecasts to account for China’s sluggish economic growth and slow recovery in the real estate industry. As such, we lower our 2024-26 earnings forecasts by 17%-20% and cut our fair value estimates to HKD 26.00 per H-share (CNY 23.90 per A-share) from HKD 29.00 (CNY 26.50). We believe Conch remains undervalued, with its H-shares trading at 0.4 times 2024 price/book and a dividend yield of close to 5%. Given its strong balance sheet and net cash position, we think Conch will be able to navigate the current industry downcycle.