Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 2.08, based on its valuation and growth potential [4]. Core Views - The company is a leading cement producer in South China, benefiting from both traditional and new building materials, with cement revenue accounting for 60-80% of total income [1][11]. - The company has expanded its aggregate and new material business since 2021, with aggregate revenue contributing HKD 1.62 billion and gross profit of HKD 880 million in 2023, indicating a growing segment [1][3]. - The report highlights the potential for profit recovery in the cement sector due to recent price increases in the Guangdong and Guangxi regions, following a period of declining prices [2][4]. Summary by Sections Company Overview - The company, known as China Resources Cement Holdings, has a total share capital of approximately 6.98 billion shares and a market capitalization of about HKD 10.40 billion [1]. - The company has a debt-to-asset ratio of 36.89% and a net asset value per share of HKD 6.94 [1]. Cement Market Analysis - The demand for cement in Guangdong is expected to grow, supported by infrastructure projects and a rebound in fixed asset investments, with a projected increase in construction activities [2][23]. - The supply side has seen a significant increase in clinker capacity in Guangxi, with a total of 24.64 million tons added from 2020 to 2023, leading to a more concentrated market [2][24]. - The report notes that the price of cement in the region has been recovering since June 2023, indicating a potential for improved profitability [2][4]. Non-Cement Business - The company has made significant investments in aggregate production, with a total capacity of 92.5 million tons and sales of over 45 million tons in 2023, contributing to its revenue growth [3][13]. - The company has diversified its business into new materials, establishing a solid foundation for long-term transformation [3][11]. Financial Projections - Revenue projections for 2024-2026 are estimated at HKD 23.32 billion, HKD 23.69 billion, and HKD 25.04 billion, respectively, with a forecasted net profit of HKD 860 million, HKD 1.23 billion, and HKD 1.52 billion [4][7]. - The company maintains a high dividend payout ratio of 45-50% over the past five years, with a current price-to-book (PB) ratio of 0.26, indicating strong valuation appeal [4][7].

Company Overview - The total number of issued shares of China Resources Building Materials Technology Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[4]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[4]. - The company changed its name from China Resources Cement Holdings Limited to China Resources Building Materials Technology Holdings Limited on November 3, 2023[4]. Financial Performance - For the six months ended June 30, 2024, the Group's unaudited consolidated turnover was RMB 10,311.7 million, a decrease of 13.9% compared to the same period last year[31]. - The unaudited consolidated profit attributable to owners of the Company for the period was RMB 165.8 million, representing a decrease of 70.2% from the corresponding period last year[32]. - Basic earnings per share for the period was RMB 0.024, down from RMB 0.080 in the previous year[31]. - The consolidated gross profit for the Period was RMB 1,544.8 million, representing a decrease of 23.3% from RMB 2,012.9 million for the corresponding period in 2023 (Restated) and a gross margin of 15.0%, down 1.8 percentage points from 16.8%[128]. - The company's total comprehensive income for the period was RMB 110,050,000, compared to RMB 476,453,000 in the prior year, a decrease of around 77.0%[171]. Operational Insights - The management discussion and analysis section provides insights into operational performance and strategic initiatives for future growth[6]. - The company is focused on expanding its market presence and enhancing its product offerings through new technologies and innovations[6]. - Significant events planned for 2024 include potential mergers and acquisitions to strengthen market position[6]. - The company aims to improve operational efficiency and reduce costs through strategic investments in technology[6]. - Future outlook indicates a commitment to sustainable practices and increasing production capacity to meet market demand[6]. Production Capacity - As of June 30, 2024, the Group operates 101 cement grinding lines with an annual production capacity of 90.2 million tons[21]. - The Group has 49 clinker production lines with an annual production capacity of 63.3 million tons[21]. - The Group operates 64 concrete batching plants with an annual production capacity of 39.8 million cubic meters[21]. - The Group's annual production capacity of aggregates in operation reached approximately 93.5 million tons, with an expected total capacity of 135.7 million tons upon completion of all projects[90]. Market and Product Focus - The main markets for the Group's products include Guangdong, Guangxi, Fujian, Hainan, Yunnan, Guizhou, Shanxi, and Hunan[20]. - The Group's products are primarily used in infrastructure projects such as railways, highways, subways, and power stations[20]. - The Group's operations are supported by a well-established logistics network including waterways, railways, and roads[20]. Sustainability and Innovation - The Group emphasizes corporate social responsibility, focusing on energy saving, emission reduction, and the development of new products and technologies[25]. - The Group is actively participating in the green, low-carbon transformation initiatives set forth by the Chinese government[47]. - The Group's carbon capture and utilization research platform aims for an annual CO2 capture capacity of 100,000 tons, contributing to carbon neutrality in the cement industry[106]. - The Group's focus on green and sustainable development includes initiatives for carbon peaking and carbon neutrality, aligning with national environmental goals[62]. Financial Position and Management - The Group's total assets as of June 30, 2024, were RMB 72,614.3 million, slightly down from RMB 72,792.2 million as of December 31, 2023[28]. - The equity attributable to owners of the Company was RMB 44,210.4 million, an increase from RMB 44,108.5 million at the end of 2023[28]. - The Group's net current liabilities were RMB 5,317.9 million as of June 30, 2024, indicating a need for careful liquidity management[141]. - The Group's capital management is centralized and regularly monitored to ensure sufficient cash reserves for both short-term and long-term liquidity needs[139]. Governance and Compliance - The company has complied with the applicable provisions of the Corporate Governance Code during the reporting period[150]. - Changes in the board of directors include the retirement of Mr. IP Shu Kwan Stephen as of May 24, 2024[150]. - Mr. NG Kam Wah Webster has been appointed as a member of the Competition Commission for a period of two years starting May 1, 2024[150]. Market Trends and Economic Indicators - In the first half of 2024, China's GDP grew by 5.0% year-on-year to RMB 61.7 trillion[39]. - National fixed asset investment (FAI) increased by 3.9% year-on-year to RMB 24.5 trillion[39]. - The floor space of commodity housing sold in China decreased by 19.0% year-on-year to 480 million m², with sales amounting to RMB 4.7 trillion, a 25.0% year-on-year decline[42].

Investment Rating - Maintains an "Overweight" rating for Huarun Construction Materials Technology (1313) [2][4] Core Views - The company's cement business shows resilience with stable profitability at the bottom, and the price recovery in Guangdong and Guangxi regions is expected to boost price and profit expectations for the second half of 2024 [4] - The aggregate business continues to grow rapidly, with accelerated capacity release, contributing to a new profit growth point [4] - The company's cement shipments outperformed the industry, with a 2% year-on-year decline in H1 2024, compared to a 10% decline in national cement production [5] - Cement profitability may have bottomed out, with a slight recovery in Q2 2024, and the implementation of price recovery in Guangdong and Guangxi is expected to support profit recovery in Q3 2024 [5] - The aggregate business maintained high growth, with shipments increasing by 107% year-on-year in H1 2024, and the company's aggregate capacity is expected to reach 136 million tons after the release of under-construction capacity [5] Financial Performance - In H1 2024, the company reported revenue of RMB 10.312 billion, a year-on-year decrease of 13.9%, and net profit attributable to shareholders of RMB 166 million, a year-on-year decrease of 70.2% [5] - In Q2 2024, the company's revenue was RMB 5.467 billion, with net profit attributable to shareholders of RMB 195 million, in line with previous forecasts [5] - The average price of cement and clinker in H1 2024 was RMB 238 per ton, with a cost of RMB 210 per ton, resulting in a gross profit of RMB 29 per ton [5] - The aggregate business achieved shipments of 29.5 million tons in H1 2024, with an average price of RMB 36.8 per ton and a gross profit of RMB 14.5 per ton [5] Market Data - The current stock price is HKD 1.56, with a 52-week range of HKD 1.05 to HKD 2.74 [6] - The current market capitalization is HKD 10.893 billion, with 6.983 billion shares outstanding [6] Historical Financial Summary - Revenue in 2021 was HKD 43.963 billion, decreasing to HKD 26.894 billion in 2024E [7] - Net profit in 2021 was HKD 7.767 billion, decreasing to HKD 1.002 billion in 2024E [7] - The PE ratio is expected to decrease from 15.34 in 2023 to 10.87 in 2024E [7]

[Company Profile and Financial Summary](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B%E5%8F%8A%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Overview of Key Financial Performance](index=1&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%A6%82%E8%A6%BD) China Resources Cement Holdings Limited recorded revenue of RMB 10,311.7 million in the first half of 2024, a year-on-year decrease of 13.9%, with profit attributable to owners significantly declining by 70.2% to RMB 165.8 million Overview of Key Financial Data for H1 2024 | Indicator | H1 2024 (RMB million) | H1 2023 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,311.7 | 11,974.6 | (13.9)% | | Profit attributable to owners of the company | 165.8 | 556.0 | (70.2)% | | Basic EPS (RMB) | 0.024 | 0.080 | (70.0)% | | Interim Dividend per Share (HKD) | 0.02 | 0.041 | (51.2)% | | Total Assets (as of June 30) | 72,614.3 | 72,792.2 (as of Dec 31) | (0.2)% | | Equity attributable to owners of the company (as of June 30) | 44,210.4 | 44,108.5 (as of Dec 31) | 0.2% | | Gearing Ratio (as of June 30) | 38.8% | 36.9% (as of Dec 31) | 1.9 percentage points | | Net Asset Value per Share (RMB) (as of June 30) | 6.33 | 6.32 (as of Dec 31) | 0.2% | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) In the first half of 2024, the Group's revenue decreased by 13.9% to RMB 10,311.7 million, and gross profit decreased by 23.3% to RMB 1,544.8 million, with profit before tax and profit for the period significantly declining by 68.2% and 74.5% respectively Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2024 (RMB thousand) | H1 2023 (RMB thousand) (Restated) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10,311,717 | 11,974,578 | (13.9)% | | Gross Profit | 1,544,795 | 2,012,923 | (23.3)% | | Profit Before Tax | 237,887 | 747,954 | (68.2)% | | Profit for the Period | 135,220 | 529,539 | (74.5)% | | Profit Attributable to Owners of the Company | 165,764 | 555,953 | (70.2)% | | Basic EPS (RMB) | 0.024 | 0.080 | (70.0)% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2024, the Group's total assets slightly decreased by 0.2% to RMB 72,614.3 million, with net current liabilities expanding to RMB 5,317.9 million primarily due to increased bank loans, while equity attributable to owners of the company slightly increased by 0.2% Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2024 (RMB thousand) | Dec 31, 2023 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 65,067,238 | 65,101,967 | (0.1)% | | Current Assets | 7,547,068 | 7,690,270 | (1.9)% | | Current Liabilities | 12,864,933 | 10,979,935 | 17.2% | | Net Current Liabilities | (5,317,865) | (3,289,665) | (61.6)% | | Non-current Liabilities | 13,919,171 | 16,065,133 | (13.3)% | | Equity Attributable to Owners of the Company | 44,210,360 | 44,108,463 | 0.2% | | Total Equity | 45,830,202 | 45,747,169 | 0.2% | [Notes to the Financial Statements](index=5&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation and Principal Accounting Policies](index=5&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules, adopting the historical cost basis, consistent with 2023 accounting policies, with no significant impact from 2024 revised standards - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules of the Stock Exchange[8](index=8&type=chunk) - Accounting policies are consistent with the 2023 annual consolidated financial statements, with only the adoption of revised standards effective January 1, 2024, and these revisions have no significant impact on the financial statement amounts and disclosures[9](index=9&type=chunk)[10](index=10&type=chunk) [Segment Information](index=5&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operating segments include cement, concrete, and aggregates and others, with the aggregates and others segment performing strongly in the first half of 2024, while the cement segment's performance significantly declined - The Group's operating and reportable segments are cement, concrete, and aggregates and others, with revenue derived from the sale of goods[11](index=11&type=chunk) Overview of Segment Results (RMB thousand) | Segment | H1 2024 Revenue | H1 2024 Segment Results | H1 2023 Revenue (Restated) | H1 2023 Segment Results (Restated) | | :--- | :--- | :--- | :--- | :--- | | Cement | 6,891,141 | 254,495 | 9,286,659 | 881,596 | | Concrete | 1,736,957 | 75,076 | 1,483,772 | (28,860) | | Aggregates and Others | 1,683,619 | 329,217 | 1,204,147 | 252,396 | | **Total** | **10,311,717** | **658,788** | **11,974,578** | **1,105,132** | [Finance Costs](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) In the first half of 2024, the Group's total finance costs were RMB 256.4 million, a slight decrease from the same period last year, with interest on bank loans and medium-term notes remaining the main components Composition of Finance Costs (RMB thousand) | Item | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Interest on bank loans and medium-term notes | 240,119 | 254,742 | | Interest on loans from non-controlling shareholders | 2,646 | 4,836 | | Environmental restoration provision | 15,149 | 13,764 | | Payables for acquisition of assets | 23,835 | 33,229 | | Lease liabilities | 5,960 | 4,871 | | **Total** | **287,709** | **311,442** | | Less: Amount capitalized as property, plant and equipment | (31,278) | (50,802) | | **Net Finance Costs** | **256,431** | **260,640** | [Profit Before Tax](index=7&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E7%9B%88%E5%88%A9) In the first half of 2024, the Group's profit before tax was net of major expenses such as staff costs, impairment losses on trade receivables, amortization of mining rights, and depreciation of property, plant and equipment, with amortization of mining rights and depreciation of property, plant and equipment increasing Major Adjustments to Profit Before Tax (RMB thousand) | Item | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Total staff costs | 1,284,462 | 1,313,975 | | Impairment losses on trade receivables | 37,223 | 73,665 | | Amortization of mining rights | 226,828 | 132,833 | | Depreciation of property, plant and equipment | 990,155 | 952,369 | | Depreciation of right-of-use assets | 119,213 | 100,781 | | Interest income | (19,508) | (43,879) | [Taxation](index=8&type=section&id=%E7%A8%85%E9%A0%85) In the first half of 2024, the Group's total taxation was RMB 102.7 million, a significant decrease from the same period last year, with the effective tax rate rising to 43.2% due to results of associates, exchange differences, and PRC withholding tax Composition of Taxation (RMB thousand) | Item | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Current tax | 261,066 | 313,681 | | Deferred tax | (158,399) | (95,266) | | **Total Taxation** | **102,667** | **218,415** | - Hong Kong profits tax is calculated at **16.5%**, PRC corporate income tax at **25%**, and includes a **5%** dividend withholding tax and deferred tax on estimated distributed profits[16](index=16&type=chunk) [Earnings Per Share](index=8&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) In the first half of 2024, basic earnings per share attributable to owners of the company were RMB 0.024, a significant decrease from RMB 0.080 in the same period last year, with diluted earnings per share not presented due to the absence of potential ordinary shares Calculation of Basic Earnings Per Share (RMB thousand) | Indicator | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Profit attributable to owners of the company for basic EPS | 165,764 | 555,953 | | Weighted average number of shares | 6,982,937,817 | 6,982,937,817 | | Basic EPS (RMB) | 0.024 | 0.080 | [Trade and Other Receivables and Payables](index=9&type=section&id=%E6%87%89%E6%94%B6%E5%8F%8A%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE) As of June 30, 2024, total trade receivables increased to RMB 2,545.6 million, while total trade payables decreased to RMB 2,428.6 million, with the Group granting customers 0 to 60 days credit and obtaining 30 to 90 days credit from suppliers Trade Receivables (RMB thousand) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Trade receivables from third parties | 2,330,047 | 1,540,201 | | Trade receivables from related parties | 215,598 | 179,421 | | **Total** | **2,545,645** | **1,719,622** | Trade Payables (RMB thousand) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Trade payables to third parties | 2,340,293 | 2,882,184 | | Trade payables to related parties | 88,334 | 96,435 | | **Total** | **2,428,627** | **2,978,619** | - The average credit period for trade receivables is **0 to 60 days**, and for trade payables is **30 to 90 days**[18](index=18&type=chunk)[20](index=20&type=chunk) [Interim Dividend](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) [Declaration and Payment Arrangements for Interim Dividend](index=10&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E5%AE%A3%E6%B4%BE%E5%8F%8A%E6%B4%BE%E4%BB%98%E5%AE%89%E6%8E%92) The Board resolved to declare an interim dividend of HKD 0.02 per share for the first half of 2024, a decrease from the prior year, with payment scheduled for October 25, 2024, and shareholders having the option to receive it in HKD or RMB - The interim dividend for the first half of 2024 is **HKD 0.02 per share**, a decrease from HKD 0.041 per share in the same period of 2023[21](index=21&type=chunk) - The total dividend amount is approximately **HKD 139.7 million**, to be paid on or about October 25, 2024[21](index=21&type=chunk) - Shareholders may elect to receive the dividend in HKD or RMB at a specified exchange rate (**HKD 1 to RMB 0.91654**), with the record date being September 20, 2024[21](index=21&type=chunk) [Suspension of Share Register Procedures](index=10&type=section&id=%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E6%89%8B%E7%BA%8C%E6%9A%AB%E5%81%9C) To determine the entitlement to the interim dividend, the company will suspend share transfer registration procedures from September 16 to September 20, 2024 - Share transfer registration procedures will be suspended from **Monday, September 16, 2024**, to **Friday, September 20, 2024**[22](index=22&type=chunk) [Business Environment Analysis](index=11&type=section&id=%E7%87%9F%E5%95%86%E7%92%B0%E5%A2%83%E5%88%86%E6%9E%90) [Macroeconomic Overview](index=11&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E6%A6%82%E8%A6%BD) In the first half of 2024, China's economy operated steadily, with GDP growing by 5.0% and fixed asset investment by 3.9%, as the government issued ultra-long-term special treasury bonds and local government bonds to support infrastructure investment, which rose by 5.4% - In the first half of 2024, China's GDP grew by **5.0% year-on-year** to **RMB 61.7 trillion**[23](index=23&type=chunk) - National fixed asset investment (excluding rural households) increased by **3.9% year-on-year** to **RMB 24.5 trillion**[23](index=23&type=chunk) - The government plans to issue **RMB 1 trillion** in ultra-long-term special treasury bonds and has issued approximately **RMB 1.8 trillion** in new local government bonds to support infrastructure construction, with national infrastructure investment rising by **5.4% year-on-year**[23](index=23&type=chunk) [Real Estate Market and Urban Development](index=12&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E5%B8%82%E5%A0%B4%E5%8F%8A%E5%9F%8E%E5%B8%82%E7%99%BC%E5%B1%95) China's real estate market remains in a period of transformation and adjustment, with commercial housing sales area and sales value decreasing by 19.0% and 25.0% respectively in the first half of 2024, while the government actively promotes "three major projects" to foster high-quality urban development - In the first half of 2024, national commercial housing sales area decreased by **19.0% year-on-year** to **480 million square meters**, and sales value decreased by **25.0% year-on-year** to **RMB 4.7 trillion**[24](index=24&type=chunk) - National real estate development investment decreased by **10.1% year-on-year** to **RMB 5.3 trillion**, with new housing starts and completed housing areas decreasing by **23.7%** and **21.7%** respectively[24](index=24&type=chunk) - The Chinese government is steadily advancing "three major projects" including affordable housing construction, urban village renovation, and dual-use public infrastructure development to address real estate market changes and promote high-quality urban development[24](index=24&type=chunk) [Industry Overview and Policies](index=12&type=section&id=%E8%A1%8C%E6%A5%AD%E6%A6%82%E8%A6%BD%E5%8F%8A%E6%94%BF%E7%AD%96) [Cement Industry Performance and Capacity](index=12&type=section&id=%E6%B0%B4%E6%B3%A5%E8%A1%8C%E6%A5%AD%E8%A1%A8%E7%8F%BE%E5%8F%8A%E7%94%A2%E8%83%BD) In the first half of 2024, national cement output decreased by 10.0% to 850 million tons, with cement output in major operating regions also generally declining, while the industry added approximately 3.4 million tons of clinker capacity, including 1.5 million tons in Hunan - In the first half of 2024, national cement output decreased by **10.0% year-on-year** to **850 million tons**[25](index=25&type=chunk) - Cement output in the Group's major operating regions (such as Guangdong, Guangxi, Fujian, etc.) all experienced negative year-on-year growth[25](index=25&type=chunk) - Two new clinker production lines were added nationwide, increasing annual capacity by approximately **3.4 million tons**, with one new clinker production line in Hunan adding approximately **1.5 million tons** of annual capacity[25](index=25&type=chunk) [Energy Saving, Emission Reduction, and Green Development](index=13&type=section&id=%E7%AF%80%E8%83%BD%E6%B8%9B%E6%8E%92%E8%88%87%E7%B6%A0%E8%89%B2%E7%99%BC%E5%B1%95) The Chinese government actively promotes the green and low-carbon transformation of the cement industry, implementing ultra-low emission upgrades with a target of 50% clinker capacity in key regions completing upgrades by the end of 2025, and advancing energy saving and carbon reduction in the construction sector by requiring all new buildings to comply with green building standards - China's Ministry of Ecology and Environment and four other departments jointly issued the "Opinions on Promoting the Implementation of Ultra-Low Emissions in the Cement Industry," aiming for **50% of cement clinker capacity** in key regions to complete upgrades by the end of 2025[26](index=26&type=chunk) - The "Action Plan for Accelerating Energy Saving and Carbon Reduction in the Construction Sector" specifies that by 2025, all new urban buildings will fully implement green building standards[26](index=26&type=chunk) - The "Special Action Plan for Energy Saving and Carbon Reduction in the Cement Industry" targets controlling cement clinker capacity at around **1.8 billion tons** by the end of 2025, with comprehensive energy consumption per unit product reduced by **3.7%** compared to 2020[26](index=26&type=chunk) [Energy Consumption and Carbon Emission Management](index=14&type=section&id=%E8%83%BD%E8%80%97%E8%88%87%E7%A2%B3%E6%8E%92%E6%94%BE%E7%AE%A1%E7%90%86) The government released the "2024-2025 Energy Saving and Carbon Reduction Action Plan," strengthening carbon emission intensity management and promoting the inclusion of the cement industry in the national carbon emission trading market, while revising capacity replacement measures to encourage industrial waste utilization in cement kilns and strictly prohibit inter-provincial replacement - The "2024-2025 Energy Saving and Carbon Reduction Action Plan" requires strengthening capacity and output control in the building materials industry, strictly regulating new building material project access, and promoting energy-saving and carbon-reducing upgrades in the building materials industry[27](index=27&type=chunk) - China's Ministry of Ecology and Environment has compiled documents such as the "Guidelines for Accounting and Reporting of Greenhouse Gas Emissions by Enterprises - Cement Clinker Production" to prepare for the inclusion of the cement industry in the national carbon emission trading market[27](index=27&type=chunk) - The "Implementation Measures for Capacity Replacement in the Cement and Glass Industries (2024 Draft for Comment)" encourages the comprehensive utilization of industrial waste in cement kilns and strictly prohibits inter-provincial replacement to optimize industrial layout[27](index=27&type=chunk) [Industrial Structure and Safety Production](index=15&type=section&id=%E7%94%A2%E6%A5%AD%E7%B5%90%E6%A7%8B%E8%88%87%E5%AE%89%E5%85%A8%E7%94%A2%E7%94%9F) The government highly values safety production, issuing the "Key Points for Mine Safety Production Work in 2024" and the "Three-Year Action Plan for Fundamental Safety Production Improvement (2024-2026)," aiming to deepen the investigation of hidden disaster factors, advance proactive management of major hazards, and enhance intrinsic safety levels - The "Key Points for Mine Safety Production Work in 2024" proposes measures such as deepening the investigation of hidden disaster factors, advancing proactive management of major hazards, and strengthening intelligent mine construction[28](index=28&type=chunk) - The "Three-Year Action Plan for Fundamental Safety Production Improvement (2024-2026)" aims to enhance intrinsic safety levels over three years and accelerate the modernization of safety production governance systems and capabilities[28](index=28&type=chunk) [Transformation and Innovation](index=15&type=section&id=%E8%BD%89%E5%9E%8B%E8%88%87%E5%89%B5%E6%96%B0) [New Business Development](index=15&type=section&id=%E6%96%B0%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95) The Group actively seizes new business development opportunities, optimizing its business structure, with rapid development in the aggregates business, initial completion of the national layout for engineered stone, and concrete utilized as a sales channel for cement and aggregates - The Group actively seizes new business development opportunities, fully leveraging the integrated synergistic advantages of cement, aggregates, and concrete, achieving rapid development in the aggregates business and initial success in optimizing its business structure[29](index=29&type=chunk) - In basic building materials, approximately **9 million tons** of new annual aggregates capacity were added, further enhancing aggregates production capacity[29](index=29&type=chunk) - In functional building materials, the national layout for engineered stone has been initially completed, with continuous product iteration and upgrades[29](index=29&type=chunk) [Aggregates Business](index=21&type=section&id=%E9%AA%A8%E6%96%99%E6%A5%AD%E5%8B%99) In the first half of 2024, the Group accelerated the construction and commissioning of aggregates projects, adding approximately 9 million tons of annual capacity, with subsidiaries' operational capacity around 93.5 million tons and associates' attributable capacity around 3.6 million tons, and total capacity expected to significantly increase upon full completion - In the first half of 2024, the Group added approximately **9 million tons** of annual aggregates capacity in Zhaoqing, Guangdong, Guigang, Guangxi, and other locations[41](index=41&type=chunk) - As of June 30, 2024, subsidiaries' operational (including trial production) annual aggregates capacity was approximately **93.5 million tons**, with associates' attributable annual aggregates capacity around **3.6 million tons**[41](index=41&type=chunk) - Upon full completion, the Group's annual aggregates capacity controlled through subsidiaries is expected to reach **135.7 million tons**, with associates' and joint ventures' attributable capacity around **13.5 million tons**[41](index=41&type=chunk) [Functional Building Materials Business](index=21&type=section&id=%E5%8A%9F%E8%83%BD%E5%BB%BA%E6%9D%90%E6%A5%AD%E5%8B%99) The Group has initially completed its national layout for engineered stone, adding multiple production lines with an annual capacity of 26.1 million square meters, and by optimizing its marketing system and brand promotion, it signed 4 strategic key accounts and achieved cost reduction and efficiency improvement through measures like centralized procurement and formula optimization - The Group has initially completed its national layout for engineered stone, with new production lines commissioned in Dongguan and Laibin, and current annual engineered stone capacity is approximately **26.1 million square meters**[42](index=42&type=chunk) - Through professional exhibitions, showroom development, and digital marketing, the "Runpin" brand exposure continues to expand, and **4 new strategic key accounts** have been signed[42](index=42&type=chunk) - Cost reduction and efficiency improvement in the engineered stone business are deepened through measures such as centralized procurement, raw material substitution, formula optimization, and process adjustments[43](index=43&type=chunk) [New Materials Business](index=22&type=section&id=%E6%96%B0%E6%9D%90%E6%96%99%E6%A5%AD%E5%8B%99) The Group continues to explore new materials, with the high-purity quartz sand project for photovoltaic new energy having completed pilot line bidding, and the Hubei Chongyang calcium oxide project and Guangxi Guigang calcium-based project, both with mining rights, expected to commence production in 2024, adding annual capacities of 250,000 tons of calcium oxide and 500,000 tons of calcium oxide plus 100,000 tons of calcium hydroxide, respectively - The high-purity quartz sand project for photovoltaic new energy has completed the bidding for its **500-ton pilot line**[43](index=43&type=chunk) - The Hubei Chongyang calcium oxide project and Guangxi Guigang calcium-based project have both obtained mining rights, with resource reserves of approximately **84 million tons** and **110 million tons** respectively[43](index=43&type=chunk) - The Hubei Chongyang calcium oxide project (annual capacity of **250,000 tons**) and the Guangxi Guigang high-end calcium-based project (annual capacity of **500,000 tons of calcium oxide** and **100,000 tons of calcium hydroxide**) are both expected to commence production in 2024[43](index=43&type=chunk) [Green and Sustainable Development](index=16&type=section&id=%E7%B6%A0%E8%89%B2%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95) The Group focuses on "ecology, environmental protection, safety, and intensive resource utilization" as its main work theme, actively promoting industrial transformation and upgrading, and practicing green and sustainable development, adding 5 new provincial or autonomous region-level green mines in the first half of the year and receiving industry recognition for technological innovation and ESG performance - The Group focuses on "ecology, environmental protection, safety, and intensive resource utilization" as its main work theme, actively engaging in energy saving, emission reduction, pollution reduction, and carbon reduction initiatives[30](index=30&type=chunk) - In the first half of 2024, **5 new provincial or autonomous region-level green mines** were added, bringing the total to **9 national-level green mines** and **21 provincial or autonomous region-level green mines**[30](index=30&type=chunk) - The Group has been selected for the "China ESG Listed Companies Pioneer 100" list for two consecutive years, ranking **13th**, with its ESG performance at a "five-star" level[30](index=30&type=chunk) [Digital Transformation](index=22&type=section&id=%E6%95%B8%E5%AD%97%E5%8C%96%E8%BD%89%E5%9E%8B) As a digital intelligence benchmark enterprise of China Resources Group, the Group continues to advance digital and intelligent construction by promoting "Lighthouse Factory" experience, independently developing AI intelligent solutions, launching multiple management systems, and participating in industry standard setting, thereby comprehensively enhancing management and operational efficiency - The Group independently developed an AI intelligent solution for machine vision inspection of alternative fuels, successfully applied in multiple bases, reducing coal consumption[44](index=44&type=chunk) - Safety production management systems and quality management systems were launched in multiple bases, and information systems coverage was completed for **19 new bases**, achieving "business online, standardized management, and integrated business and finance"[45](index=45&type=chunk) - Intelligent logistics systems were promoted and launched in **6 aggregates and cement bases**, achieving an innovative upgrade from cement "one-card" to "one-code" access[45](index=45&type=chunk) [Smart Factory](index=22&type=section&id=%E6%99%BA%E8%83%BD%E5%B7%A5%E5%BB%A0) The Group promotes "Lighthouse Factory" advanced manufacturing experience, independently developing an AI intelligent solution for machine vision inspection of alternative fuels, effectively reducing calciner temperature standard deviation and coal consumption, while also promoting ERP systems to the engineered stone industry to aid smart manufacturing - The Group independently developed an AI intelligent solution for machine vision inspection of alternative fuels, replacing manual inspection with "advanced control + machine vision detection technology" to reduce calciner temperature standard deviation and coal consumption[44](index=44&type=chunk) - ERP systems for the engineered stone industry are being promoted to Shandong Runhe New Material Co., Ltd. and others, gradually advancing the digital construction of the engineered stone business[44](index=44&type=chunk) [Smart Applications and Industrial Internet](index=23&type=section&id=%E6%99%BA%E8%83%BD%E6%87%89%E7%94%A8%E8%88%87%E5%B7%A5%E6%A5%AD%E4%BA%92%E8%81%AF%E7%B6%B2) The Group deepens digital empowerment, launching safety production and quality management systems in multiple bases and completing information system coverage for 19 new bases, while jointly applying with China Resources Group for a Guangdong Province Industrial Internet identification and resolution innovative application project to promote cement quality and logistics traceability - Safety production management systems and quality management systems were launched in multiple bases, and the new national standard GB175-2023 "Common Portland Cement" was implemented at the system level[45](index=45&type=chunk) - Information system coverage was completed for **19 new bases** including aggregates and new materials, rapidly achieving "business online, standardized management, and integrated business and finance"[45](index=45&type=chunk) - Jointly applied with China Resources Group for a Guangdong Province Industrial Internet identification and resolution innovative application project, advancing the launch of three application scenarios: cement quality traceability, logistics traceability, and equipment operation and maintenance[45](index=45&type=chunk) [Smart Logistics](index=23&type=section&id=%E6%99%BA%E8%83%BD%E7%89%A9%E6%B5%81) In the first half of the year, the Group completed the promotion and launch of smart logistics systems in 6 aggregates and cement bases, and upgraded the cement "one-card" to "one-code" access, simplifying pickup processes and reducing hardware operation and maintenance costs - In the first half of the year, smart logistics systems were promoted and launched in **6 aggregates and cement bases**, including Jingang, Runlong, and Heqing[45](index=45&type=chunk) - Achieved an innovative upgrade from cement "one-card" to "one-code" access, further simplifying driver pickup processes and reducing base hardware operation and maintenance costs[45](index=45&type=chunk) [Smart Marketing](index=23&type=section&id=%E6%99%BA%E8%83%BD%E7%87%9F%E9%8A%B7) In the first half of the year, the Group fully launched digital transformation projects for marketing models across its major regional cement, aggregates, concrete, tile adhesive, and engineered stone businesses, achieving 100% coverage, with the e-commerce platform's cumulative shipment volume approximately 220 million tons and around 40,000 registered users - In the first half of the year, digital transformation projects for marketing models were fully launched across major regional cement, aggregates, concrete, tile adhesive, and engineered stone businesses, achieving **100% coverage**[46](index=46&type=chunk) - The e-commerce platform's cumulative shipment volume was approximately **220 million tons**, with around **40,000 registered users**, **541 cumulative carriers**, and approximately **96,000 cumulative vehicles (vessels)**[46](index=46&type=chunk) [Research and Development and Innovation](index=24&type=section&id=%E7%A0%94%E7%99%BC%E8%88%87%E5%89%B5%E6%96%B0) The Group has 588 scientific and technological talents, including over 80 full-time R&D personnel, and in the first half of the year, it actively promoted the R&D of new products and technologies, including rotary kiln/step kiln technology, raw meal additives, in-situ CO2 self-enrichment process, and carbon-fixing aerated concrete products, holding 325 valid patents with 16 new authorized patents in the first half - The Group has **588 scientific and technological talents**, including over **80 full-time R&D personnel**, comprising professor-level senior engineers, doctors, and masters[47](index=47&type=chunk) - Successfully developed rotary kiln/step kiln technology and equipment, independently developed raw meal additives, and established a carbon utilization research platform, with an initial **100,000 tons of CO2 capture capacity per year**[47](index=47&type=chunk) - As of June 30, 2024, the company holds a total of **325 valid patents** (including **87 invention patents**), with **16 new authorized patents** in the first half of the year[47](index=47&type=chunk) [Production Capacity and Cost Management](index=17&type=section&id=%E7%94%A2%E8%83%BD%E8%88%87%E6%88%90%E6%9C%AC%E7%AE%A1%E7%90%86) [Changes in Production Capacity and Utilization Rate](index=17&type=section&id=%E7%94%A2%E8%83%BD%E8%AE%8A%E5%8C%96%E5%8F%8A%E5%88%A9%E7%94%A8%E7%8E%87) In the first half of 2024, the Group's clinker and cement capacities remained unchanged, while total annual concrete capacity increased by approximately 1.35 million cubic meters, with cement production line utilization slightly increasing to 64.2%, concrete utilization significantly rising to 27.1%, and clinker utilization slightly decreasing - Clinker and cement capacities remained unchanged, while total annual concrete capacity increased by approximately **1.35 million cubic meters** compared to the end of 2023[31](index=31&type=chunk) Production Line Utilization Rate | Product | H1 2024 Utilization Rate | H1 2023 Utilization Rate | | :--- | :--- | :--- | | Cement | 64.2% | 63.6% | | Clinker | 75.6% | 78.9% | | Concrete | 27.1% | 21.3% | [Operating Cost Management](index=17&type=section&id=%E9%81%8B%E7%87%9F%E6%88%90%E6%9C%AC%E7%AE%A1%E7%90%86) Focusing on "strengthening fundamentals for upgrades, driving transformation through technological innovation," the Group built full value chain cost analysis capabilities, systematically reduced production costs, and promoted the "Four-Year Action Plan for Energy Saving and Carbon Reduction," with 21 production lines achieving GB16780 Level 1 energy consumption benchmark, increasing capacity share to 44% - The Group built full value chain cost analysis capabilities, systematically reducing production costs, with most product costs significantly lower than the same period last year and budget[33](index=33&type=chunk) - Standard coal consumption per ton of clinker product decreased compared to the 2023 average; production lines achieving GB16780 Level 1 energy consumption benchmark increased by **7 to 21**, raising capacity share from **33% to 44%**[33](index=33&type=chunk) - In mine safety management, safety levels are enhanced by strengthening design review, slope stability analysis, and promoting digital smart mine construction[34](index=34&type=chunk) [Procurement Management](index=18&type=section&id=%E6%8E%A1%E8%B3%BC%E7%AE%A1%E7%90%86) In the first half of 2024, the Group's total coal procurement was approximately 3.6 million tons, with average prices decreasing by 18.7%, and it plans to continue strategic cooperation with major domestic coal suppliers and expand direct procurement channels for Australian coal, while reducing costs for blended materials and aggregates procurement through various channel optimization and negotiation strategies - In the first half of 2024, total coal procurement was approximately **3.6 million tons**, with an average price of **RMB 828 per ton**, a **18.7% decrease** from the same period last year[35](index=35&type=chunk)[55](index=55&type=chunk) - In the future, the Group will maintain strategic cooperation with major domestic coal suppliers, establish direct procurement channels for Australian coal, and continue to explore other supply channels with price advantages[36](index=36&type=chunk) - For blended materials and aggregates procurement, costs are reduced through measures such as broadening procurement channels, developing direct sourcing, strengthening regional centralized procurement, and price negotiations[36](index=36&type=chunk) [Logistics Management](index=19&type=section&id=%E7%89%A9%E6%B5%81%E7%AE%A1%E7%90%86) In the first half of 2024, the Group's logistics costs showed an overall downward trend through measures such as optimizing routes, adjusting vessel types, planning two-way logistics, and exploring new energy electric vehicle businesses, while maintaining an annual transportation capacity of approximately 45.9 million tons in the Xijiang River basin and controlling 30 transit warehouses with an annual transit capacity of 31.5 million tons - Logistics costs showed an overall downward trend through measures such as optimizing routes, adjusting vessel types, planning two-way logistics, and exploring new energy electric vehicle businesses[37](index=37&type=chunk) - The Group has an annual transportation capacity of approximately **45.9 million tons** in the Xijiang River basin, controls **30 transit warehouses** with an annual transit capacity of **31.5 million tons**, consolidating its dominant position in South China[37](index=37&type=chunk) [Marketing and Brand Building](index=20&type=section&id=%E5%B8%82%E5%A0%B4%E7%87%9F%E9%8A%B7%E8%88%87%E5%93%81%E7%89%8C%E5%BB%BA%E8%A8%AD) [Product Promotion](index=20&type=section&id=%E7%94%A2%E5%93%81%E6%8E%A8%E5%BB%A3) The Group continues to promote special products such as nuclear power cement and road Portland cement, enhancing its differentiated competitive advantage, with nuclear power cement application expanding to nuclear island domes and road Portland cement successfully applied in major airport pavement projects - Continuously promoting special products such as nuclear power cement and road Portland cement to enhance differentiated competitive advantages[38](index=38&type=chunk) - Nuclear power cement application expanded to the nuclear island domes of nuclear power projects; road Portland cement was successfully applied in Fuzhou Airport Phase II and Xiamen New Airport pavement pouring projects[38](index=38&type=chunk) - Special products such as medium-heat and low-heat cement are applied in major national infrastructure projects like the Yalin section of the Sichuan-Tibet Railway and multiple hydropower station projects[38](index=38&type=chunk) [Brand Building](index=20&type=section&id=%E5%93%81%E7%89%8C%E5%BB%BA%E8%A8%AD) The Group is committed to comprehensively enhancing the "Runfeng" brand influence, adding over 1,200 new partners through the "Key User and Decoration Company Special Enhancement Program," while continuously building the unified brand "Runpin" for its functional building materials business, expanding brand exposure through professional exhibitions, showrooms, and digital media - Through the launch of the "Key User and Decoration Company Special Enhancement Program" and surveys, over **1,200 new key users and decoration companies** were partnered, enhancing the "Runfeng" brand reputation[39](index=39&type=chunk) - Continuously building the unified brand "Runpin" for functional building materials business, shaping brand image through professional exhibitions, showrooms, and "Master Lectures" and other activities[39](index=39&type=chunk) - Fully utilizing communication channels such as official accounts and video accounts in conjunction with offline marketing to continuously expand brand exposure[39](index=39&type=chunk) [Employee Information](index=25&type=section&id=%E5%83%B1%E5%93%A1%E4%BF%A1%E6%81%AF) [Employee Profile and Costs](index=25&type=section&id=%E5%83%B1%E5%93%A1%E6%A6%82%E6%B3%81%E5%8F%8A%E6%88%90%E6%9C%AC) As of June 30, 2024, the Group employed a total of 17,165 full-time employees, a slight decrease from the end of 2023, with total staff costs (including directors' emoluments) at RMB 1,284.5 million, a year-on-year decrease of 2.2% - As of June 30, 2024, the Group employed a total of **17,165 full-time employees**, with **359 in Hong Kong** and **16,806 in mainland China**[48](index=48&type=chunk) Employee Functional Distribution | Function | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Management | 475 | 481 | | Finance, Administration and Others | 2,336 | 2,381 | | Production Personnel | 9,325 | 9,973 | | Technical Personnel | 4,265 | 4,408 | | Marketing Personnel | 764 | 696 | | **Total** | **17,165** | **17,939** | - Total staff costs (including directors' emoluments) for the first half of 2024 were approximately **RMB 1,284.5 million**, a **2.2% decrease** from RMB 1,314.0 million in the same period last year[49](index=49&type=chunk) [Talent Development](index=25&type=section&id=%E4%BA%BA%E6%89%8D%E5%9F%B9%E9%A4%8A) Based on the "14th Five-Year Plan" talent development program, the Group is committed to building a "3+1" talent team, conducting specialized talent training, and providing career guidance and follow-up training for young employees - Based on the "14th Five-Year Plan" talent development program, the Group is committed to building a "3+1" talent team and gradually conducting specialized talent training[50](index=50&type=chunk) [Business Review](index=26&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) [Revenue Analysis](index=26&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D%E5%88%86%E6%9E%90) In the first half of 2024, the Group's consolidated revenue was RMB 10,311.7 million, a year-on-year decrease of 13.9%, with average selling prices of cement, clinker, concrete, and aggregates all decreasing, but aggregates sales volume significantly increasing by 107.3% - Consolidated revenue for the first half of 2024 reached **RMB 10,311.7 million**, a **13.9% decrease** from the same period last year[52](index=52&type=chunk) Product Sales Volume, Average Selling Price, and Revenue (RMB thousand) | Product | H1 2024 Sales Volume (thousand tons/cubic meters) | H1 2024 Average Selling Price (RMB) | H1 2024 Revenue | H1 2023 Sales Volume (thousand tons/cubic meters) | H1 2023 Average Selling Price (RMB) | H1 2023 Revenue (Restated) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cement | 27,687 | 240.0 | 6,644,876 | 28,521 | 315.9 | 9,009,615 | | Clinker | 1,276 | 193.0 | 246,265 | 1,023 | 270.8 | 277,044 | | Concrete | 5,057 | 343.5 | 1,736,957 | 3,803 | 390.1 | 1,483,772 | | Aggregates | 29,497 | 36.8 | 1,086,961 | 14,230 | 35.6 | 506,350 | | Others | - | - | 596,658 | - | - | 697,797 | | **Total** | - | - | **10,311,717** | - | - | **11,974,578** | - External sales volume of aggregates significantly increased by **107.3%**, while the average selling prices of cement, clinker, and concrete decreased by **24.0%**, **28.7%**, and **11.9%** respectively[53](index=53&type=chunk)[54](index=54&type=chunk) [Cost of Sales](index=27&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) In the first half of 2024, the Group's average coal procurement price decreased by 18.7%, and both unit coal consumption and standard coal consumption per ton of clinker decreased, leading to a 21.3% reduction in average coal cost per ton of clinker, with average electricity cost and consumption per ton of cement also decreasing concurrently - The average coal procurement price was **RMB 828 per ton**, a **18.7% decrease** from the same period last year[55](index=55&type=chunk) - Unit coal consumption per ton of clinker decreased from **134.2 kg to 129.9 kg**, and standard coal consumption decreased from **99.5 kg to 97.2 kg**[55](index=55&type=chunk) - Average electricity cost per ton of cement decreased by **8.0%** from **RMB 31.3 to RMB 28.8**, with electricity consumption at **68.1 kWh**[55](index=55&type=chunk) [Gross Profit and Gross Profit Margin](index=27&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) In the first half of 2024, the Group's consolidated gross profit was RMB 1,544.8 million, a year-on-year decrease of 23.3%, and the consolidated gross profit margin decreased by 1.8 percentage points to 15.0%, primarily due to lower selling prices of cement products and concrete - Consolidated gross profit was **RMB 1,544.8 million**, a **23.3% decrease** from the same period last year[56](index=56&type=chunk) - The consolidated gross profit margin was **15.0%**, a **1.8 percentage point decrease** from the same period last year, mainly due to lower selling prices of cement products and concrete[56](index=56&type=chunk) Product Gross Profit Margin | Product | H1 2024 Gross Profit Margin | H1 2023 Gross Profit Margin (Restated) | | :--- | :--- | :--- | | Cement | 12.5% | 16.1% | | Clinker | 2.5% | 7.7% | | Concrete | 12.6% | 10.4% | | Aggregates | 39.4% | 55.0% | [Other Income and Expenses](index=28&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E8%B2%BB%E7%94%A8) In the first half of 2024, other income decreased by 20.0% to RMB 140.2 million, sales and distribution expenses decreased by 3.6% but their percentage of consolidated revenue increased to 2.0%, and general and administrative expenses decreased by 2.7% but their percentage of consolidated revenue increased to 9.2% - Other income was **RMB 140.2 million**, a **20.0% decrease** from the same period last year[57](index=57&type=chunk) - Sales and distribution expenses decreased by **3.6%** to **RMB 208.1 million**, with their percentage of consolidated revenue increasing from **1.8% to 2.0%**[57](index=57&type=chunk) - General and administrative expenses decreased by **2.7%** to **RMB 944.4 million**, with their percentage of consolidated revenue increasing from **8.1% to 9.2%**[58](index=58&type=chunk) [Results of Associates and Joint Ventures](index=28&type=section&id=%E8%81%AF%E7%96%B2%E5%8F%8A%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE) In the first half of 2024, the Group's associates incurred a loss of RMB 65.2 million, an expansion from the loss in the same period last year, while joint ventures generated a profit of RMB 24.1 million, slightly lower than the same period last year - Associates incurred a loss of **RMB 65.2 million**, an expansion from the loss of RMB 23.1 million in the same period last year[59](index=59&type=chunk) - Joint ventures generated a profit of **RMB 24.1 million**, a slight decrease from the profit of RMB 28.4 million in the same period last year[60](index=60&type=chunk) [Net Profit Margin](index=28&type=section&id=%E6%B7%A8%E5%88%A9%E6%BD%A4%E7%8E%87) In the first half of 2024, the Group's net profit margin was 1.3%, a decrease of 3.1 percentage points from 4.4% in the same period last year, reflecting a decline in profitability - The Group's net profit margin for the period was **1.3%**, a **3.1 percentage point decrease** from **4.4%** (restated) in the same period last year[61](index=61&type=chunk) [Liquidity and Financial Resources](index=29&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) [Sources of Funds and Cash Position](index=29&type=section&id=%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90%E5%8F%8A%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) The Group's sources of funds primarily include internal funds, bank loans, medium-term notes, related party loans, and operating cash flow, with cash and bank balances (including pledged deposits) at RMB 1,454.7 million as of June 30, 2024, a decrease from the end of 2023 - The Group's sources of funds primarily include internal funds, bank loans, medium-term notes, loans from related parties, issuance of equity securities, and cash flows from operations[62](index=62&type=chunk) Cash and Bank Balances (RMB thousand) | Currency | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | HKD | 177,483 | 185,521 | | RMB | 1,454,678 | 2,888,053 | | USD | 153 | 153 | [Bank and Other Borrowings](index=29&type=section&id=%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E8%B2%B8) As of June 30, 2024, the Group's total bank and other borrowings were RMB 17,143.6 million, with floating-rate borrowings accounting for approximately 77%, and borrowings due within one year amounting to RMB 5,395.0 million, while the Group has RMB 23,506.7 million in unutilized bank loan facilities and complies with all financial covenants Bank and Other Borrowings (RMB thousand) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Bank loans | 15,952,256 | 16,090,113 | | Medium-term notes | 1,000,000 | - | | Loans from related parties | 191,325 | 191,325 | | **Total** | **17,143,581** | **16,281,438** | - Fixed-rate and floating-rate borrowings were **RMB 3,892.8 million** and **RMB 13,250.8 million** respectively[64](index=64&type=chunk) - Borrowings due within one year amounted to **RMB 5,395.0 million**. The Group has **RMB 23,506.7 million** in unutilized bank loan facilities and complies with financial covenants requiring a net gearing ratio not exceeding **180%**[66](index=66&type=chunk) [Medium-Term Notes and Financial Management](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E7%A5%A8%E6%93%9A%E5%8F%8A%E8%B2%A1%E5%8B%99%E7%AE%A1%E7%90%86) The Group has been approved to register medium-term notes totaling RMB 15 billion and issued the first tranche of RMB 1 billion in April 2024 to repay domestic bank borrowings, while adopting a prudent and cautious financial management policy and regularly monitoring liquidity needs and foreign currency risks - The Group has been approved to register medium-term notes totaling **RMB 15 billion** and issued the first tranche of **RMB 1 billion** in April 2024, with a coupon rate of **2.44%** and a three-year term[67](index=67&type=chunk) - The Group adopts a prudent and cautious financial policy for financial management, with centralized management of cash, financing, and investment activities[67](index=67&type=chunk) - The Group currently has no foreign currency hedging policy, but management regularly monitors relevant foreign currency risks, with non-RMB denominated debt accounting for **12% of total debt**[67](index=67&type=chunk) [Net Current Liabilities and Future Solvency](index=31&type=section&id=%E6%B5%81%E5%8B%95%E8%B2%A0%E5%80%B5%E6%B7%A8%E5%80%BC%E5%8F%8A%E6%9C%AA%E4%BE%86%E5%84%AA%E4%BB%98%E8%83%BD%E5%8A%9B) As of June 30, 2024, the Group's net current liabilities were RMB 5,317.9 million, but the Board believes the Group is capable of meeting its future financial obligations, considering existing cash, unutilized credit facilities, and anticipated sources of funds - As of June 30, 2024, the Group's net current liabilities were **RMB 5,317.9 million**[68](index=68&type=chunk) - The Board believes that the Group will be able to meet its financial obligations as they fall due in the foreseeable future, primarily based on cash, unutilized bank loan facilities, medium-term note facilities, and anticipated internally generated funds[68](index=68&type=chunk) [Pledged Assets and Contingent Liabilities](index=31&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC%E5%8F%8A%E6%88%96%E7%84%B6%E8%B2%A0%E5%80%B5) As of June 30, 2024, the Group had no pledged assets, and contingent liabilities primarily consisted of bank loan guarantees granted to associates and joint ventures, with an utilized amount of RMB 1,402.1 million - As of June 30, 2024, the Group had no pledged assets[69](index=69&type=chunk) - The Group has issued guarantees for bank loan facilities granted to associates and joint ventures, totaling **RMB 1,966.1 million**, of which **RMB 1,402.1 million** has been utilized[69](index=69&type=chunk) [Future Plans and Capital Expenditure](index=31&type=section&id=%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA) [Capital Expenditure Budget and Funding](index=31&type=section&id=%E8%B3%87%E6%9C%AC%E6%94%AF%E5%87%BA%E9%A0%90%E7%AE%97%E5%8F%8A%E6%8B%A8%E4%BB%98) As of June 30, 2024, the Group's outstanding capital expenditure for expansion plans yet to be invested was approximately RMB 4,697.3 million, with total estimated capital expenditure payments for the second half of 2024 at approximately RMB 2,836.6 million, to be funded by borrowings and internally generated funds - As of June 30, 2024, the Group's outstanding capital expenditure for expansion plans yet to be invested was approximately **RMB 4,697.3 million**[70](index=70&type=chunk) - Total estimated capital expenditure payments for the second half of 2024 are approximately **RMB 2,836.6 million**, to be funded by borrowings and internally generated funds[70](index=70&type=chunk) [Strategy and Outlook](index=31&type=section&id=%E6%88%B0%E7%95%A5%E8%88%87%E5%89%8D%E6%99%AF) [Macro Policy Orientation](index=31&type=section&id=%E5%AE%8F%E8%A7%80%E6%94%BF%E7%AD%96%E5%B0%8E%E5%90%91) The Chinese government adheres to seeking progress while maintaining stability, strengthening macroeconomic regulation, and coordinating new urbanization with comprehensive rural revitalization, with proactive fiscal policies continuing to support infrastructure construction, the real estate market building a new development model, and rural construction advancing, all providing demand support for the building materials industry - The Chinese government adheres to seeking progress while maintaining stability, strengthening macroeconomic regulation, and coordinating new urbanization with comprehensive rural revitalization to promote high-quality economic development[71](index=71&type=chunk) - Proactive fiscal policies will enhance the带动 effect of government investment, timely issue and utilize ultra-long-term special treasury bonds, and support the implementation of "two major" projects[72](index=72&type=chunk) - The real estate market will coordinate research on policy measures to digest existing housing inventory and optimize incremental housing, build a new development model, and introduce multiple housing loan support policies[72](index=72&type=chunk) - The Central Document No. 1 proposes advancing comprehensive rural revitalization, including the construction of "four good rural roads" and renovation of dilapidated rural houses, which is beneficial for supporting demand in the cement and other building materials industries[72](index=72&type=chunk) [Group's Future Strategy](index=32&type=section&id=%E9%9B%86%E5%9C%98%E6%9C%AA%E4%BE%86%E6%88%B0%E7%95%A5) The Group will accelerate the layout of strategic emerging industries, promote green development, and foster an innovative and entrepreneurial spirit, focusing on "strengthening fundamentals for upgrades, driving transformation through technological innovation" to deepen reforms, increase R&D investment, achieve green and intelligent industrial upgrades, and strive to build a world-class building materials technology enterprise - The Group will accelerate the layout of strategic emerging industries, promote green development, and foster an innovative and entrepreneurial spirit to inject lasting momentum into the enterprise's high-quality development[72](index=72&type=chunk) - Focusing on the annual management theme of "strengthening fundamentals for upgrades, driving transformation through technological innovation," the Group will deeply implement reform and enhancement actions and accelerate the pace of traditional industry upgrades[72](index=72&type=chunk) - Increase R&D investment, empower traditional businesses with technological innovation for green and intelligent industrial upgrades, and strive to build a world-class building materials technology enterprise[72](index=72&type=chunk) [Corporate Governance and Others](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96) [Corporate Governance](index=33&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) In the first half of 2024, the company complied with the applicable code provisions contained in Part 2 of Appendix C1 to the Listing Rules - The company complied with the applicable code provisions contained in Part 2 of Appendix C1 to the Listing Rules during the period[73](index=73&type=chunk) [Dealings in Listed Securities](index=33&type=section&id=%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) Neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities in the first half of 2024 - Neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities during the period[73](index=73&type=chunk) [Review of Interim Report and Acknowledgements](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E5%AF%A9%E9%96%B1%E5%8F%8A%E8%87%B4%E8%AC%9D) The company's interim report for the first half of 2024 has been reviewed by the Audit Committee, and the Board expresses sincere gratitude to all stakeholders for their contributions and continued support - The company's interim report for the period has been reviewed by the company's Audit Committee[74](index=74&type=chunk) - The Board thanks the directors, management team, and all employees for their contributions, and shareholders, customers, suppliers, business partners, and other stakeholders for their continued trust and support[74](index=74&type=chunk) [Publication of Interim Report](index=33&type=section&id=%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E7%99%BB%E8%BC%89) The company's interim report for the first half of 2024 will be published on the HKEXnews website and the company's website in due course - The company's interim report for the period will be published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.cr-bmt.com) in due course[74](index=74&type=chunk)

证券研究报告 华润建材科技 (1313 HK) 港股通 供给侧优化,催化盈利和估值修复 华泰研究 更新报告 2024 年 7 月 14 日│中国香港 水泥 | --- | --- | |-------------------------------|----------------------| | 投资评级(维持): | 买入 | | 目标价(港币): | 3.75 | | 研究员 SAC No. S0570519110002 | 龚劼gongjie@htsc.com | | SFC No. BHG354 | +(86) 21 2897 2095 | | 研究员 | 方晏荷 | | SAC No. S0570517080007 | fangyanhe@htsc.com | | SFC No. BPW811 | +(86) 755 2266 0892 | 1H24 业绩预告弱于预期,但最困难的阶段可能已经渡过 华润建材科技发布 1H24 业绩预告,预计期间归母净利润同比-65%~-70%, 隐含 2Q24 归母净利润同比 1.96~2.24 亿元,同比-66%~-70%%,低于市场 预期(Visible Al ...

股 票 研 究 华润建材科技(1313) 评级: 增持 [当前价格 Table_CurPrice] :(港元) 1.44 华南复价验证区域格局,盈利与估值或修复 ——华润建材科技更新报告 | [table_Authors] 鲍雁辛 ( 分析师 ) | 花健 祎 ( 分析师 ) | 巫恺洋 ( 研究助理 ) | |-----------------------------------------|------------------------|---------------------------| | 0755-23976830 | 0755-23976858 | 0755-23976666 | | baoyanxin@gtjas.com | huajianyi@gtjas.com | wukaiyang028675@gtjas.com | | S0880513070005 | S0880521010001 | S0880123070145 | 本报告导读: 广西水泥前期提价落实情况良好,两广市场盈利有望企稳回升,公司作为两广区域龙 头充分受益,有望迎来盈利及估值修复。 投资要点: 维持"增持"评级。伴随区 ...

建材 华润建材科技(1313) 评级: 增持 [当前价格 Table_CurPrice] :(港元) 1.44 2024.06.26 股 票 研 究 华南复价验证区域格局,盈利与估值或修复 ——华润建材科技更新报告 | [table_Authors] 鲍雁辛 ( 分析师 ) | 花健 祎 ( 分析师 ) | 巫恺洋 ( 研究助理 ) | |-----------------------------------------|------------------------|---------------------------| | 0755-23976830 | 0755-23976858 | 0755-23976666 | | baoyanxin@gtjas.com | huajianyi@gtjas.com | wukaiyang028675@gtjas.com | | S0880513070005 | S0880521010001 | S0880123070145 | 本报告导读: 广西水泥前期提价落实情况良好,两广市场盈利有望企稳回升,公司作为两广区域龙 头充分受益,有望迎来盈利及估值修复。 投资要点 ...

海 外 研 证券研究报告 究 ＃industryId＃ 水泥 ＃investSuggestion＃ ＃01313 .HK ＃华dy润Com建pa材ny＃科 技 港股通（沪/深） dyStockco ＃ 买入 ( i维nve持stS ） d e＃ 水 泥销量逆势＃提title＃升 ，骨料放量 uggesti on gC e＃ ha n ＃createTime1＃ 2024年 5月 6日 投资要点 公 ＃市场ma数rk据et Data＃ ＃summary＃ 事件：公司披露Q1业绩：营收同比下降5.6%至47.9亿元（单位人民币，下同）， 司 日期 20240506 归母净利润亏损2887万元。 跟 收盘价（港元） 1.37 踪 总股本（亿股） 70 点评：传统淡季&南方雨季频繁，水泥需求更弱，Q1行业基本处于亏损状态。 报 流通股本（亿股） 70 ——量：更注重份额保持，Q1公司出货量表现优于行业。全国水泥Q1产量同比 告 净资产（亿元） 487 -11.8%，公司水泥&熟料出货量同比+5.2%至1303万吨，广东出货量同比+9.1%， 总资产（亿元） 803 广西出货量同比基本持平。 每股净资产（元） 6.97 ...

Revenue Performance - Revenue for the three months ended March 31, 2024, was RMB 4,788.4 million, a decrease of 5.6% compared to RMB 5,070.2 million for the same period in 2023[2] - The consolidated revenue for the period reached RMB 4,788,400,000, a decrease of 5.6% compared to RMB 5,070,200,000 in the same period last year[15] Profitability - Gross profit for the period was RMB 661.5 million, up from RMB 607.5 million in the previous year[4] - The consolidated gross profit for the period was RMB 661,500,000, an increase of 8.9% from RMB 607,500,000 in the same period last year[18] - The consolidated gross profit margin improved to 13.8%, up 1.8 percentage points from 12.0% in the same period last year[18] - The company reported a pre-tax loss of RMB 14.5 million, significantly improved from a loss of RMB 45.1 million in the previous year[4] - Other income decreased to RMB 56.3 million from RMB 70.5 million year-on-year[4] Net Loss - The net loss attributable to the company's owners for the period was RMB 28.9 million, compared to a loss of RMB 30.0 million in the same period last year[2] - The company reported a loss attributable to owners of RMB 28,900,000 for the period, compared to a loss of RMB 30,000,000 in the same period last year[19] Assets and Liabilities - The total assets attributable to the company's owners were RMB 72,921.6 million, with a debt-to-equity ratio of 39.3%, compared to 36.9% in the previous year[2] Share Performance - Basic loss per share remained at RMB 0.004 for both periods[4] Inventory and Cash Flow - Inventory increased to RMB 2,318.6 million from RMB 1,896.0 million year-on-year[5] - Cash and bank balances decreased to RMB 1,711.7 million from RMB 2,603.7 million[5] Dividend - The company has not declared an interim dividend for the current period, consistent with the previous year[2] - The company did not recommend any dividend payment for the period ending March 31, 2023[14] Sales Volume and Revenue Breakdown - The sales volume of cement was 12,637 thousand tons, with an average selling price of RMB 245.8 per ton, resulting in revenue of RMB 3,106,631,000[16] - The sales volume of clinker was 396 thousand tons, with an average selling price of RMB 197.8 per ton, generating revenue of RMB 78,433,000[16] - The sales volume of concrete was 2,305 thousand cubic meters, with an average selling price of RMB 354.9 per cubic meter, leading to revenue of RMB 817,997,000[16] - The sales volume of aggregates was 14,158 thousand tons, with an average selling price of RMB 37.4 per ton, resulting in revenue of RMB 529,515,000[16] Regional Sales Performance - The sales performance by region showed Guangdong with 5,854 thousand tons sold, generating revenue of RMB 1,514,920,000[17]

Company Overview - The total number of issued shares of China Resources Building Materials Technology Holdings Limited is 6,982,937,817, with China Resources Group holding approximately 68.72% of the issued shares[5]. - The company was re-listed on the main board of the Stock Exchange on October 6, 2009, after being privatized in 2006[5]. - The company changed its name from China Resources Cement Holdings Limited to China Resources Building Materials Technology Holdings Limited on November 3, 2023[5]. - The company is the holding entity for all cement and concrete operations of China Resources Group, which was established on March 13, 2003[4]. - The company has undergone significant changes in its corporate structure, including privatization and re-listing, impacting its operational strategy[4]. Financial Performance - The Group's turnover for 2023 was RMB 25,549.6 million, a decrease from RMB 36,929.2 million in 2022[55]. - The profit attributable to owners of the Company for 2023 was RMB 643.8 million, down from RMB 1,612.6 million in 2022[55]. - The Group's EBITDA for 2023 was RMB 4,082.0 million, compared to RMB 4,418.8 million in 2022[55]. - The consolidated turnover for the year ended 31 December 2023 amounted to RMB 25,549.6 million, representing a decrease of 12.9% compared to the previous year[58]. - The consolidated profit attributable to owners of the Company for the year ended 31 December 2023 was RMB 643.8 million, a decrease of 60.1% year-on-year[58]. - Basic earnings per share for the year was RMB 0.092[58]. - The total distribution for the year ended 31 December 2023 will be HK$0.047 per share, down from HK$0.129 per share in 2022[59]. - An interim dividend of HK$0.041 per share was declared for 2023, compared to HK$0.12 per share in 2022[58]. - The final dividend recommended for the year ended 31 December 2023 is HK$0.006 per share, down from HK$0.009 per share in 2022[58]. Production Capacity and Operations - The Group operates 101 cement grinding lines and 49 clinker production lines, with annual production capacities of 90.2 million tons of cement and 63.3 million tons of clinker respectively[33]. - The concrete batching plants have an annual production capacity of 38.4 million cubic meters[33]. - The Group's annual production capacity for concrete is supported by 63 concrete batching plants[33]. - The Group owns a total of 74 cement grinding lines, 30 clinker production lines, and 20 concrete batching plants, with total annual production capacities of 64.7 million tons of cement, 37.0 million tons of clinker, and 8.5 million m³ of concrete[35]. - The Group's facilities are strategically located to optimize production and distribution efficiency[33]. Market and Sales - The Group's products are primarily used in infrastructure projects such as railways, highways, subways, bridges, airports, ports, dams, hydroelectric power stations, and nuclear power stations[33]. - The main sales regions for the Group's products include Guangdong, Guangxi, Fujian, Hainan, Yunnan, Guizhou, Shanxi, and Hunan[33]. - The Group's aggregates business is being vigorously developed to increase market share and accelerate project construction[112]. - The Group's aggregates projects are positioned as a key profit contributor, enhancing construction, operation, and sales capabilities[115]. Environmental and Regulatory Compliance - The Group's emission concentrations of nitrogen oxides, particulate matters, and sulphur dioxide are better than the national standard limits of pollutant emissions[36]. - The Chinese government aims for 50% of cement clinker production capacity in key regions to complete ultra-low emissions transformation by the end of 2025, and 80% by the end of 2028[74]. - The Group's competitiveness in energy saving and carbon reduction is crucial for sustainable development, with ongoing efforts to promote alternative fuels and improve energy efficiency[109]. - The Group has implemented a "Four-Year Action Plan for Energy Saving and Carbon Reduction" to enhance operational management and control in basic building materials[112]. Research and Development - The Group continued to increase investment in research and development, promoting the upgrade of cement production lines and the application of grinding aids for raw materials[90]. - The Group's research and development team consists of 607 technology talents, including 5 professor-level senior engineers and 17 doctorate holders[159]. - The Group has initiated research on new materials, including silicon-based materials, basalt materials, and energy storage battery materials, to support enterprise transformation[161]. - The Group established the Engineered Stone Technology and Engineering Innovation Center in June 2023, enhancing its research and development capabilities[167]. Strategic Initiatives - The Group revised its "Fourteenth Five-Year Plan" development strategy, focusing on a business portfolio of "4+1" including cement, aggregates, concrete, engineered stone, and new materials[100]. - In 2024, the Group aims to enhance core competitiveness through increased R&D investment and promote green and intelligent upgrades in traditional industries[102]. - The Group's annual management theme for 2024 is "strengthening the foundations and grasping upgrades, technological innovation promotes transformation"[102]. Human Resources and Talent Development - As of December 31, 2023, the Group employed a total of 17,939 employees, a decrease from 19,046 employees as of December 31, 2022[165]. - The Group's average age of managerial staff is approximately 47 years, with 84% holding university degrees or above[166]. - The Group's focus on talent development is based on the "3+1" talent team cultivation plan, which includes special talent training programs[166]. Logistics and Supply Chain - The Group's annual shipping capacity along the Xijiang River was approximately 39.9 million tons, ensuring stable logistics capabilities for business operations[120]. - The Group controlled the operation of 30 silo terminals with a total annual capacity of approximately 30.9 million tons, primarily located in the Pearl River Delta Region of Guangdong[120]. - The Group implemented measures to reduce shipping costs through optimizing tender schemes and introducing multiple logistics providers[120]. Customer Satisfaction and Brand Development - The customer satisfaction rate reached 98.19% in 2023, reflecting a year-on-year increase of 0.57%[128]. - The Group established 19 brand flagship stores and 5 specialty stores to enhance the "Runpin" brand image and product system[128]. - The Group's "Runpin" brand received multiple industry awards, including the "Most Impetuous Enterprise Award" and the "Golden Orchid Award" in the ceramic tile adhesives sector[143].