Group 1 - The core viewpoint of the report is that Huadong Securities has given a "buy" rating to Conch Cement (600585.SH) with a latest price of 24.33 yuan [1] - The reasons for the rating include a decrease in cement clinker volume but an increase in price, leading to improved profitability despite revenue pressure [1] - There is an expectation for an improved supply-demand balance in the second half of the year, which may lead to a price recovery [1]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company's profitability is improving, with attention on positive changes from the supply side [1] - In the first half of 2025, the company achieved operating revenue of 41.292 billion yuan, a year-on-year decline of 9.38%, while net profit attributable to shareholders increased by 31.34% to 4.368 billion yuan [3][5] Financial Performance Summary - In the first half of 2025, the average price of cement and clinker was 274.31 yuan/ton, an increase of 8.28 yuan/ton year-on-year, while the average cost decreased by 9.25 yuan/ton, leading to a comprehensive gross profit margin of 28.41%, up by 5.70 percentage points [5] - The company sold a total of 12.7 million tons of cement and clinker, a slight decrease of 0.09% year-on-year [5] - The forecast for operating revenue from 2025 to 2027 is 93.285 billion yuan, 100.296 billion yuan, and 106.363 billion yuan, respectively, with net profits expected to be 9.871 billion yuan, 10.728 billion yuan, and 11.022 billion yuan [6][5] Market Outlook - The supply-demand dynamics in the cement industry are expected to improve in the second half of 2025, driven by government investments in infrastructure and major strategic projects, although the real estate market remains under pressure [5] - The average PE ratio for the company is projected to be 13.1, 12.0, and 11.7 for the years 2025, 2026, and 2027, respectively, compared to the average valuation of comparable companies at 14.8 times PE [5][7]

Core Insights - The article highlights the top and bottom AH share premium rates as of August 29, with Northeast Electric (00042) leading at 785.25% and Ningde Times (03750) at -13.55% [1][2][3] Group 1: Top AH Share Premium Rates - Northeast Electric (00042) has a premium rate of 785.25% with a deviation value of 5.90% [2] - Andeli Juice (02218) follows with a premium rate of 253.20% and a deviation value of 40.75% [2] - Hongye Futures (03678) ranks third with a premium rate of 246.76% and a deviation value of 17.02% [2] Group 2: Bottom AH Share Premium Rates - Ningde Times (03750) has the lowest premium rate at -13.55% with a deviation value of 6.61% [2] - Heng Rui Medicine (01276) shows a premium rate of 4.11% and a deviation value of 7.74% [2] - China Merchants Bank (03968) has a premium rate of 7.02% with a deviation value of 1.87% [2] Group 3: Top AH Share Deviation Values - Jinli Permanent Magnet (06680) leads with a deviation value of 42.99% and a premium rate of 121.34% [3] - Andeli Juice (02218) again appears with a deviation value of 40.75% [3] - Zhejiang Shibao (01057) has a deviation value of 25.37% [3] Group 4: Bottom AH Share Deviation Values - BYD Company (01211) has the lowest deviation value at -66.83% with a premium rate of 19.42% [3] - Longpan Technology (02465) follows with a deviation value of -46.69% [3] - Great Wall Motors (02333) has a deviation value of -22.48% [3]

Core Viewpoint - Goldman Sachs reports that Conch Cement (600585)(00914) achieved a net profit of 4.6 billion RMB in the first half of the year, representing a year-on-year increase of 33% [1] Financial Performance - Excluding one-time items related to capacity replacement provisions, the recurring net profit reached 5.1 billion RMB, up 32% year-on-year [1] - The better-than-expected performance is attributed to improved profit margins in the overseas cement business and stronger-than-expected results in ready-mixed concrete (RMC) and aggregate businesses [1] Forecast Adjustments - Goldman Sachs has reduced its recurring net profit forecast for the current year by 13% to reflect the ongoing low profit margins in the domestic cement market, while maintaining forecasts for the next two years largely unchanged [1] Target Price Changes - The target price for H-shares has been raised from 27 HKD to 31 HKD, and the target price for A-shares (600585.SH) has been increased from 27 RMB to 32 RMB, with a "Buy" rating maintained [1]

Core Viewpoint - Goldman Sachs reported that Conch Cement (00914) achieved a net profit of 4.6 billion RMB in the first half of the year, representing a year-on-year increase of 33% [1] Financial Performance - Excluding one-time items related to capacity replacement provisions, the recurring net profit reached 5.1 billion RMB, up 32% year-on-year [1] - The performance exceeded expectations, primarily benefiting from improved profit margins in the overseas cement business and better-than-expected results in ready-mixed concrete (RMC) and aggregate businesses [1] Forecast Adjustments - Goldman Sachs lowered its recurring net profit forecast for the current year by 13% to reflect the ongoing low profit margins in the domestic cement market, while maintaining forecasts for the next two years largely unchanged [1] Target Price Changes - The target price for H-shares was raised from 27 HKD to 31 HKD, and the target price for A-shares (600585.SH) was increased from 27 RMB to 32 RMB, with a "Buy" rating maintained [1]

Summary of Anhui Conch Cement (0914.HK) Earnings Review Company Overview - **Company**: Anhui Conch Cement - **Stock Codes**: 0914.HK (Hong Kong), 600585.SS (Shanghai) - **Market Cap**: HK$126.8 billion / $16.3 billion - **Industry**: Basic Materials, specifically Cement Production Key Financial Highlights - **1H25 Net Profit**: Rmb4.6 billion, EPS of Rmb0.874/share, up 33% YoY [1] - **Recurring Net Profit**: Rmb5.1 billion, up 32% YoY, excluding one-offs [1] - **Interim Dividend**: Proposed Rmb0.24/share, 27% payout ratio, compared to nil in previous interims [1] - **Sales Volume**: 126 million tons of self-produced cement, flat YoY, outperforming national market decline of -4.3% [23] - **Gross Profit from Cement**: Increased by 34% YoY, driven by higher unit profit in domestic and overseas markets [23] Earnings Estimates and Projections - **2025E Recurring Earnings**: Revised down by 13% due to persistent low cement margins in China [2] - **2026E and 2027E Earnings Growth**: Expected growth of 34% and 3% respectively [2] - **Price Target**: Revised to HK$31.00 / Rmb32.00, implying a 2026E P/E of 10.4x [2] - **Free Cash Flow (FCF)**: Expected to be Rmb6.7-12.7 billion in 2025-26E, with a FCF yield of 5.5-10.5% [22] Operational Insights - **Cement Operations**: Contributed 84% of total gross profit, with improved overseas margins from pricing recovery in Uzbekistan and Cambodia [23] - **Aggregate and RMC Operations**: Gross profit above expectations, with RMC sales up 3% YoY [24] - **Cost Management**: Total SG&A better than expected due to lower administrative costs [25] - **Cash Flow**: Operating cash flow increased by 21% YoY in 1H25A, with slight improvements in working capital management [26] Market and Industry Outlook - **Cement Pricing**: Expected to improve in 2026E and 2027E due to industry control on unauthorized capacity [2][38] - **Risks**: 1. Weaker-than-expected property and infrastructure demand affecting utilization and pricing [40] 2. Slower exit from unauthorized cement capacity leading to depressed prices [40] 3. Increased competition and potential new production lines affecting market share [40] 4. Rising raw material costs impacting margins [40] Valuation Metrics - **P/E Ratios**: 2025E at 11.4x, 2026E at 7.9x [13] - **P/B Ratios**: 2025E at 0.6x, 2026E at 0.6x [13] - **Dividend Yield**: Expected to be 4.3% in 2025E and 6.5% in 2026E [22] Conclusion - **Investment Recommendation**: Maintain Buy rating on Anhui Conch Cement, with an attractive risk-reward profile based on potential margin improvements and strong cash flow generation [2][38]

Investment Rating - The report maintains a "Buy" rating for the company, considering the profit growth driven by investment returns and the positive shift in free cash flow [4]. Core Insights - The company's revenue for H1 2025 was 3.086 billion CNY, showing a year-over-year decline of 1.55%, while the net profit attributable to shareholders reached 1.286 billion CNY, reflecting a year-over-year increase of 9.33%, slightly exceeding expectations [4]. - The profit growth is primarily attributed to the increased contributions from joint ventures, particularly from Conch Cement, which contributed 839 million CNY, a year-over-year increase of 19.72% [4]. - The company has confirmed a cash flow turning point, with operating cash flow at 915 million CNY, slightly down year-over-year, but free cash flow turned positive at 366 million CNY, leading to the announcement of an interim dividend of 0.10 HKD per share [4]. Financial Data and Profit Forecast - Revenue projections show a decline from 8,015 million CNY in 2023 to 5,580 million CNY by 2027, with corresponding year-over-year growth rates of 2%, -22%, -2%, -4%, and -5% [3][5]. - Net profit is expected to increase from 2,464 million CNY in 2023 to 2,540 million CNY in 2027, with year-over-year growth rates of -18%, 16%, 4%, and 4% [3][5]. - Earnings per share are projected to rise from 1.37 CNY in 2023 to 1.42 CNY in 2027, with a price-to-earnings ratio decreasing from 7.2 to 7.0 over the same period [3][5].

海螺水泥(600585.SH)公告称，2025年上半年营业收入412.92亿元，同比下降9.38%。归属于上市公司股 东的净利润43.68亿元，同比增长31.34%。 ...

Investment Rating - The report maintains a "Strong Buy" investment rating for Conch Cement [2][6]. Core Views - Conch Cement's revenue for the first half of 2025 was CNY 41.292 billion, a year-on-year decrease of 9.38%, while net profit attributable to shareholders increased by 31.34% to CNY 4.368 billion [3]. - The decline in revenue was attributed to a reduction in material trading and a slight decrease in sales volume, with self-produced cement clinker sales at 126 million tons, down 0.35% year-on-year [4]. - The company's gross profit margin improved to 25.2%, up 6.27 percentage points year-on-year, driven by lower fuel and power costs [4]. - The annualized return on equity for the first half of 2025 was 4.63%, an increase of 1.02 percentage points year-on-year, indicating improved profitability despite still being at a relatively low level historically [5]. - The report forecasts net profits for 2025-2027 to be CNY 9.369 billion, CNY 10.404 billion, and CNY 11.667 billion, respectively, with corresponding EPS of CNY 1.77, CNY 1.96, and CNY 2.20 [6]. Summary by Sections Financial Performance - In the first half of 2025, Conch Cement achieved a net profit of CNY 4.368 billion, a 31.34% increase year-on-year, with a basic EPS of CNY 0.83 [3]. - The company's gross profit margin for the first half of 2025 was 25.2%, reflecting a significant improvement due to cost reductions [4]. Market Position and Strategy - Conch Cement is focusing on enhancing operational quality and seizing market consolidation opportunities amid a challenging industry environment [5]. - The company aims to increase market share through strategic acquisitions and overseas expansion, leveraging its scale and technological advancements [5]. Profit Forecast - The projected net profits for Conch Cement from 2025 to 2027 are CNY 9.369 billion, CNY 10.404 billion, and CNY 11.667 billion, with corresponding PE ratios decreasing from 13.99 to 11.23 [6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][7] Core Views - The company reported a significant improvement in profitability, with a notable increase in net profit by 31.34% year-on-year for the first half of 2025, despite a revenue decline of 9.38% [4] - The company's main business revenue showed positive growth, with a 2.31% increase in main business revenue, even as overall revenue decreased [4] - The company is expected to maintain a leading position in profitability within the industry, with projected net profits for 2025-2027 being 95.11 billion, 102.96 billion, and 113.99 billion respectively [4] Summary by Relevant Sections Financial Performance - In the first half of 2025, the company achieved revenue of 412.92 billion yuan, down 9.38% year-on-year, while net profit reached 43.68 billion yuan, up 31.34% [4] - The second quarter saw revenue of 222.40 billion yuan, a decrease of 8.24% year-on-year, but net profit increased by 40.26% to 25.57 billion yuan [4] Sales and Market Position - The company’s sales volume for cement clinker was 126 million tons, a decline of 0.35%, which outperformed the industry average [4] - The company’s main business segments, including cement clinker, aggregates, and commercial concrete, generated revenues of 306.58 billion, 21.12 billion, and 15.19 billion yuan respectively [4] Profitability and Cost Management - The company experienced a significant improvement in profitability due to rising sales prices and declining costs, with gross profit margin increasing from 21.8% to 28.7% [4] - The average revenue per ton of cement clinker increased by 4 yuan to 244 yuan, while the cost per ton decreased by 14 yuan to 174 yuan [4] Strategic Initiatives - The company is expanding its business through new projects and acquisitions, including a successful contract in Xinjiang and ongoing overseas projects that have enhanced its market competitiveness [4] - The company has committed to a shareholder return plan, with a mid-term dividend of 0.24 yuan per share, totaling 12.66 billion yuan, representing 29% of the net profit for the first half of the year [4]