Investment Rating - The report maintains a "Buy" rating for the company with a target price of 1.40 HKD, reflecting a 7x PE for 2024 [4][5]. Core Views - The company experienced a decline in net profit of 27.3% year-on-year, with total revenue of 3.87 billion HKD in the first half of 2024, primarily due to domestic business challenges [1][2]. - Overseas cement sales showed resilience with a 9.4% increase in revenue, driven by favorable market conditions in Africa, while domestic sales faced significant pressure [2][3]. - The company is expected to benefit from the release of new production capacity in the second half of the year, which could enhance profit elasticity [2][4]. Summary by Sections Financial Performance - In the first half of 2024, the company reported a total revenue of 39.01 billion HKD, down 11.3% year-on-year, with net profit at 3.87 billion HKD, down 27.3% [1]. - Domestic revenue fell by 25.4% to 23.80 billion HKD, while overseas revenue increased by 9.4% to 13.22 billion HKD [1][3]. Overseas Operations - The company’s overseas cement sales volume increased by 2.4% to 1.47 million tons, with an average price rise of 6.8% to 897 HKD per ton [2]. - Significant revenue growth was noted in the Congo, with a 495.3% increase, while Ethiopia faced a decline due to production halts [2]. - The overseas profit contribution rose to 90% of total profits, highlighting the growing importance of international operations [2][4]. Domestic Operations - Domestic cement sales volume decreased by 10.7% to 7.09 million tons, with an average price drop of 15.8% to 270 HKD per ton [3]. - The overall gross margin declined to 26.61%, reflecting the pressures in the domestic market [3]. Future Outlook - The company plans to reduce capital expenditure after the completion of two overseas production lines, which is expected to ease debt pressure [3]. - With the anticipated ramp-up of new production capacity, profitability is expected to improve significantly in 2025 and 2026 [2][4].

Financial Performance - Total sales volume of cement and clinker decreased by 8.3% to 8.75 million tons compared to 9.54 million tons in the same period last year[2] - Revenue declined by 15.8% to RMB 3,701.8 million from RMB 4,398.3 million year-on-year[2] - Gross profit decreased by 20.2% to RMB 985.1 million, down from RMB 1,234.2 million in the previous year[2] - Net profit attributable to shareholders fell by 27.3% to RMB 386.9 million, compared to RMB 532.2 million in the same period last year[2] - Basic earnings per share decreased by 27.6% to RMB 0.071 from RMB 0.098 year-on-year[2] - The group generated a gross profit of RMB 655,585,000 for the six months ended June 30, 2024[20] - The net profit for the six months ended June 30, 2024, was RMB 386,882 thousand, down from RMB 532,160 thousand for the same period in 2023, reflecting a decline of approximately 27.4%[30] - The company's profit attributable to equity holders decreased from RMB 532,200,000 in the first half of 2023 to RMB 386,900,000 in the first half of 2024[92] Assets and Liabilities - Total assets increased by 9.3% to RMB 35,953.5 million from RMB 32,902.9 million[3] - Net debt increased by 3.6% to RMB 8,896.3 million compared to RMB 8,556.1 million last year[3] - The net asset to debt ratio slightly decreased to 60.1% from 60.4% year-on-year[3] - Total liabilities amounted to RMB 11,456,189 thousand, compared to RMB 9,809,655 thousand, reflecting an increase of approximately 16.7%[10] - The total value of assets minus current liabilities stood at RMB 24,497,337 thousand, up from RMB 23,093,195 thousand, showing an increase of about 6.1%[10] - The company's equity attributable to owners was RMB 12,715,749 thousand, compared to RMB 12,283,445 thousand, marking an increase of about 3.5%[10] - As of June 30, 2024, the group's net current liabilities amounted to approximately RMB 2,075,500,000[95] Cash Flow and Financing - Cash and cash equivalents rose to RMB 1,013,860 thousand from RMB 922,662 thousand, indicating an increase of approximately 9.9%[9] - The group has unutilized bank financing of approximately RMB 1,023,835,000 as of June 30, 2024, available for daily business operations[14] - The group has secured additional bank financing of RMB 595,000,000 after June 30, 2024, which is available for immediate use[14] - The group is in discussions with several banks for additional financing amounting to RMB 1,925,835,000[14] - The group has secured additional bank financing of approximately RMB 595,000,000 after June 30, 2024[95] - The group is currently negotiating bank financing totaling RMB 1,925,800,000, with offers amounting to RMB 1,417,100,000 already received[95] Market and Sales - The company plans to enhance its market expansion strategies and invest in new product development to improve future performance[5] - Revenue from cement and related products for the six months ended June 30, 2024, is RMB 3,462,906,000, down from RMB 4,278,546,000 in the previous year[16] - Revenue from China for the six months ended June 30, 2024, was RMB 2,379,787 thousand, compared to RMB 3,189,595 thousand for the same period in 2023, representing a decrease of approximately 25.4%[25] - The average cement selling price in Shaanxi, Guizhou, and Xinjiang decreased due to reduced demand, impacting overall profitability[49] - The group maintained market share in key regions, with significant supply to various infrastructure projects including the Xi'an to Yan'an high-speed railway[53] Cost Management - The company plans to implement cost reduction measures in 2024 to control sales costs and administrative expenses[76] - Sales costs reduced by 14.1% from RMB 3,164,000,000 in the first half of 2023 to RMB 2,716,700,000 in the first half of 2024[81] - The average cost of coal decreased by approximately 13.4% from about RMB 975 per ton in the first half of 2023 to about RMB 760 per ton in the first half of 2024[81] Environmental and Social Responsibility - The company implemented energy-saving measures that reduced electricity consumption by about 30% and CO2 emissions by approximately 22,000 tons per million tons of cement produced[60] - The group has established hazardous waste treatment facilities in its Fuping and Mianxian factories, operational since March 2016 and October 2017 respectively, and plans to actively seek new opportunities for cement kiln collaborative disposal of solid waste in 2024[61] - The group has made charitable donations amounting to RMB 3,100,000, supporting education for impoverished students and funding cultural and sports activities[64] Future Outlook - The outlook for 2024 emphasizes the importance of high-quality development and macroeconomic policy adjustments to enhance economic vitality and prevent risks[66] - In 2024, the company expects moderate growth in demand due to reasonable growth in infrastructure needs, with several large projects already underway or expected to start[69] - The company anticipates stable prices in the second half of 2024, attributed to stricter government environmental policies limiting supply[69] - The company plans to enhance overseas development and ensure timely production of ongoing projects[67]

Investment Rating - The report maintains a "Buy" rating for the company with a 6-month outlook [1] Core Views - The company's domestic cement business, primarily in Shaanxi, is expected to face a 10% year-on-year decline in sales volume in the first half of the year, with a 20 yuan drop in gross profit per ton due to weaker demand and high base effects [2] - The African cement market shows significant growth potential, with urbanization rates at 43% and per capita cement consumption at 0.3 tons, indicating room for expansion as infrastructure and real estate development accelerate [3] - The company is well-positioned in Africa, with current production capacity of 480 million tons and plans to expand to over 1,600 million tons by 2026, driving overseas profit growth [5] - The company's cash flow improved significantly in 2023, with operating cash flow reaching a record high of 2.7 billion yuan, up 27% year-on-year, and capital expenditure expected to decrease after 2024 [6] Domestic Operations - In 2023, Shaanxi, Xinjiang, and Guizhou accounted for 76%, 16%, and 8% of domestic revenue, respectively [2] - Domestic cement prices in Shaanxi, Xinjiang, and Guizhou decreased by 66 yuan, increased by 61 yuan, and decreased by 92 yuan, respectively, in the first half of the year [2] - Domestic cement sales volume is expected to decline by 10% year-on-year in the first half of the year [2] African Market Outlook - Africa's urbanization rate is 43%, similar to China's level 20 years ago, with per capita cement consumption at 0.3 tons, indicating significant growth potential [3] - The company's operations in Ethiopia, Congo, and Mozambique benefit from strong GDP growth rates of 6.5%, 8.6%, and 5.0%, respectively, in 2023 [3] - Africa's total cement demand is estimated at 300-400 million tons, with per capita consumption below 0.3 tons, suggesting substantial room for growth [3] African Supply Landscape - Africa's total cement production capacity is 386.1 million tons/year, with the top three companies (Dangote Cement, Lafarge Holcim, and Heidelberg Cement) holding a combined market share of 30% [4] - The company is the largest Chinese cement producer in Africa and is expected to rank among the top five after completing its current expansion projects [4] - Barriers to entry in Africa include high investment costs, reliance on local governments for raw materials and power supply, and lengthy approval processes for state-owned enterprises [4] Overseas Profit Growth - Overseas profit surged 197% year-on-year in 2023, accounting for 74% of total profit, with a per-ton profit of over 200 yuan [5] - By 2026, overseas production capacity is expected to exceed 16 million tons, with profits projected to reach 3.6 billion yuan [5] - The company's overseas operations are expected to contribute significantly to future growth, with profit margins remaining stable as capacity utilization increases [5] Financial Position - Operating cash flow reached a record high of 2.7 billion yuan in 2023, up 27% year-on-year [6] - Capital expenditure in 2023 was 3.986 billion yuan, primarily for maintenance, upgrades, and new projects in Ethiopia, Congo, and Uzbekistan [6] - The company's dividend payout ratio has remained around 30% in the past three years, with a current dividend yield of approximately 6.5% [6] Financial Projections - Revenue is expected to grow from 9.021 billion yuan in 2023 to 17.945 billion yuan in 2026, with a compound annual growth rate of 22% [7] - Net profit attributable to shareholders is projected to increase from 421 million yuan in 2023 to 2.795 billion yuan in 2026, with a significant improvement in profitability [7] - The company's P/E ratio is expected to decline from 7.96x in 2023 to 1.97x in 2026, reflecting strong earnings growth [7]

Investment Rating - The report gives a "Buy" rating for the company with a target price of HKD 1.55, based on a 7x PE for 2024 [4][2]. Core Insights - The company is a leading cement enterprise in Shaanxi, China, with a dual market presence in both domestic and international sectors. It has 16 cement clinker production lines in China, with a total domestic capacity of 27 million tons per year by the end of 2023. The overseas capacity, primarily in Africa and Central Asia, is expected to reach 4.8 million tons by the end of 2023 [1][10]. - The company's overseas revenue and profit have shown significant growth, with overseas revenue reaching HKD 2.77 billion and profit HKD 1.015 billion in 2023, representing year-on-year increases of 145% and 197%, respectively [1][2]. - The company is well-positioned to benefit from the growing cement demand in Africa, particularly in populous countries with strong economic growth, and aims to increase its market share significantly in the region [1][3]. Domestic Business Summary - Domestic revenue has been declining, with revenues from Shaanxi, Xinjiang, and Guizhou in 2023 being HKD 3.79 billion, HKD 0.81 billion, and HKD 0.39 billion, respectively. Shaanxi accounts for the largest share at 76% [3][20]. - The demand in Shaanxi is under pressure due to a decline in real estate, while Xinjiang shows resilience with a 24% increase in cement production in 2023 [21][20]. - The supply side indicates a high concentration in the Shaanxi market, with the top three companies holding a 68% market share, which may provide the company with significant pricing power [27][20]. Overseas Business Summary - The overseas business is experiencing high growth, with a focus on Africa and Central Asia. The company has established a strong presence in countries like Ethiopia and Mozambique, where the economic conditions support robust cement demand [1][3]. - The company’s first overseas project in Mozambique has expanded its capacity significantly, and future capacity is projected to reach 12.2 million tons in 2024 and approximately 19.7 million tons in 2025 [1][3]. - The competitive landscape in Africa is intense, but the company is expected to rank among the top 10 cement producers as it increases its capacity in the region [1][3].

Financial Performance - Total sales volume of cement and clinker reached 20.5 million tons, an increase of 6.2% from 19.3 million tons in 2022[4] - Revenue for the year was RMB 9,020.9 million, reflecting a growth of 6.3% compared to RMB 8,489.1 million in the previous year[4] - Gross profit increased by 12.8% to RMB 2,460.0 million, up from RMB 2,181.8 million in 2022[4] - The net profit attributable to the owners of the company was RMB 421.3 million, a decrease of 65.3% from RMB 1,214.7 million in 2022[4] - The company’s total assets increased by 8.8% to RMB 32,902.9 million, compared to RMB 30,239.3 million in the previous year[4] - The net debt increased by 14.3% to RMB 8,556.1 million, up from RMB 7,487.1 million in 2022[5] - The proposed final dividend per share is 2.3 cents, a decrease of 65.7% from 6.7 cents in 2022[4] - The gross profit margin improved to 27.3%, up from 25.7% in the previous year, indicating better cost management[4] Market Conditions - In 2023, the overall cement demand in China declined due to slow economic recovery, high inflation, and strict environmental regulations, impacting the performance of the cement industry[19] - The competitive supply side continues to influence the average selling price of cement in Shaanxi province, with measures taken to balance supply and demand during off-peak seasons[19] - Fixed asset investment and real estate development investment growth rates have both declined, leading to an overall drop in cement product demand in Shaanxi province[19] - The group maintained a stable profit margin despite lower average prices in China, thanks to higher profit margins from African plants and successful cost reduction measures[19] Environmental Initiatives - The group has been actively pursuing energy-saving and emission-reduction initiatives, aiming to meet the highest industry standards[20] - The group achieved an 80% installation rate of waste heat recovery systems, reducing electricity consumption by approximately 30% and cutting CO2 emissions by about 22,000 tons per million tons of cement produced annually[20] - The nitrogen oxide emissions per ton of clinker were reduced by approximately 60% due to the installation of De-NOx equipment in all production facilities in China[20] - The group has engaged in hazardous and municipal waste incineration as part of its environmental initiatives[20] - Significant investments in environmental protection have been made, achieving pollutant discharge concentrations well below national standards[42] Production Capacity and Expansion - The company’s cement production capacity reached 31.8 million tons, with significant operations in Shaanxi, Xinjiang, Guizhou, and several African countries[8] - The company plans to leverage the "Western Development Policy" and "Silk Road Economic Development Plan" to expand its market presence in western China and Africa[9] - The company’s total cement production capacity reached 33.3 million tons by the end of 2023[27] - The company plans to focus on high-quality development in Africa for 2024 and beyond[28] Sales and Pricing - The average selling price of cement in the core market of southeastern Shaanxi province remains premium, with stable profit margins despite a decline in overall fixed asset investment and real estate development investment growth rate in 2023[36] - The average selling price in Shaanxi decreased by approximately 17.5% to about RMB 269 per ton, down from RMB 326 per ton in 2022[53] - The average cement price rose slightly to RMB 360 per ton in 2023 from RMB 358 per ton in 2022, contributing to revenue growth despite declines in aggregate and commercial concrete sales[81] Strategic Focus and Future Outlook - The company plans to enhance risk identification and control while promoting international development strategies[46] - The group anticipates that infrastructure investment will continue to support cement demand in 2024, despite low real estate investment negatively impacting the market[44] - The group expects stable prices in 2024 due to limited supply from stringent environmental policies[71] - The company is focusing on green development and carbon reduction technologies to explore cost-effective carbon emission control methods[46] Corporate Governance - The company remains committed to high corporate governance standards, ensuring transparency and accountability to shareholders[110] - The board consists of eight members, including four executive directors and four independent non-executive directors, ensuring compliance with listing rules[113] - The company has established a whistleblowing policy to allow employees and stakeholders to report misconduct confidentially[132] - The company’s risk management and internal control systems are deemed effective and sufficient by the board[137] Employee and Community Engagement - The group employed a total of 8,297 full-time employees, an increase from 7,736 in 2022, with employee benefits expenses rising to RMB 933,100,000 from RMB 776,600,000[104] - The group's charitable donations for the year ended December 31, 2023, reached RMB 21,100,000, compared to RMB 6,500,000 in 2022[200]

Investment Rating - The report maintains a **Buy** rating for Western Cement (2233 HK) [7] Core Views - Western Cement is a leading private cement enterprise with a strong market position in Shaanxi and expanding presence in Xinjiang and Africa [4] - The company has completed comprehensive layout in production equipment, resource supply, and logistics, entering a period of volume expansion [2] - Africa's cement demand exceeds 200 million tons, with prices ranging from 600-1200 RMB/ton, making it a new target for Chinese cement companies [2] - Western Cement is expected to achieve net profits of 1 37 billion and 1 81 billion in 2024 and 2025, respectively, with P/E ratios of 3 7x and 2 8x [6] Domestic Market: Shaanxi and Xinjiang - In Shaanxi, the company holds a 27% market share in clinker capacity, with a regional CR3 of 69%, ensuring stable market conditions [5] - Shaanxi's cement price is 375 RMB/ton, higher than the Yangtze River Delta, reflecting good market order [5] - In Xinjiang, the company ranks 5th in clinker capacity, with two production lines in Yili and Hotan, contributing to significant profit elasticity [5] - Xinjiang's cement production in 2023 was 48 1 million tons, up 25% YoY, with prices and profitability remaining high [5] Overseas Market: Focus on Africa - Africa's cement demand is driven by population growth and urbanization, with a total demand exceeding 200 million tons [6] - Western Cement has focused on four countries: Congo, Mozambique, Ethiopia, and Uzbekistan, with Congo and Ethiopia showing strong GDP growth [6] - In Congo, the cement price exceeds 1000 RMB/ton, and in Ethiopia, it remains above 800 RMB/ton due to supply shortages [6] - The company's overseas revenue reached 2 77 billion in 2023, accounting for 30 7% of total revenue [12] Competitive Landscape - In Africa, the top 10 companies account for 52% of the market, with Dangote being the leader with a capacity of 48 6 million tons [31] - Western Cement's overseas clinker capacity is expected to reach 853,000 tons by 2024, with a significant focus on Africa [40] Financial Performance and Outlook - The company's revenue in 2023 was 9 024 billion, up 6 3% YoY, while net profit decreased by 65 3% to 421 million due to impairments [12] - Capital expenditures have accelerated, with 1 7 billion, 3 1 billion, 4 2 billion, and 3 7 billion spent from 2019 to 2022, respectively [41] - The company's overseas projects are entering a profit release phase, with cash flow expected to stabilize [41]

Sales Volume and Revenue - Total cement and clinker sales volume increased by 6.2% to 20.5 million tons in 2023[2] - Cement sales volume rose by 7.0% to 19.8 million tons in 2023[2] - Aggregate sales volume decreased by 12.2% to 4.05 million tons in 2023[2] - Commercial concrete sales volume grew by 9.8% to 1.91 million cubic meters in 2023[2] - Revenue increased by 6.3% to RMB 9,020.9 million in 2023[2] - Revenue from cement and related products sales increased to 8,710,845 thousand RMB in 2023, up from 8,153,177 thousand RMB in 2022[20] - Revenue from construction and installation services decreased significantly to 14,370 thousand RMB in 2023 from 93,882 thousand RMB in 2022[20] - Sales of plastic bags dropped to 32,474 thousand RMB in 2023 from 54,665 thousand RMB in 2022[20] - Revenue from trading cement-related raw materials rose to 46,115 thousand RMB in 2023 from 17,220 thousand RMB in 2022[20] - Sales of gypsum generated 45,522 thousand RMB in 2023, with no revenue reported in 2022[20] - Other revenues slightly increased to 171,575 thousand RMB in 2023 from 170,191 thousand RMB in 2022[20] - Total revenue for 2023 reached 9,020,901 thousand RMB, up from 8,489,135 thousand RMB in 2022[20] - Revenue increased by 6.3% from RMB 8,489,100,000 in 2022 to RMB 9,020,900,000 in 2023[101] - Cement sales volume increased by 7.0% from 18,500,000 tons in 2022 to 19,800,000 tons in 2023[101] - Average cement price slightly increased from RMB 358 per ton in 2022 to RMB 360 per ton in 2023[101] Profit and Loss - Gross profit rose by 12.8% to RMB 2,460.0 million in 2023[2] - EBITDA decreased by 7.2% to RMB 2,948.6 million in 2023[2] - Net profit attributable to owners of the company dropped by 65.3% to RMB 421.3 million in 2023[2] - Pre-tax profit for the year was RMB 954,309 thousand, after adjustments for various items including goodwill impairment loss of RMB 69,587 thousand and losses from the disposal of a subsidiary of RMB 255,651 thousand[25] - The company recorded a net loss of RMB 277,668 thousand in 2023, primarily due to goodwill impairment losses of RMB 69,587 thousand and foreign exchange gains of RMB 45,601 thousand[40] - Net profit attributable to the company's owners decreased to RMB 421.3 million in 2023 from RMB 1,214.7 million in 2022[113] - Gross profit increased by RMB 278.2 million or 12.8% to RMB 2.46 billion, with gross margin rising from 25.7% to 27.3%[104] - Other income decreased by 69.0% to RMB 142.7 million, primarily due to a reduction in government subsidies by RMB 308.6 million or 88.2%[105] - Administrative expenses increased by 31.7% to RMB 796.4 million, driven by higher costs related to African business development[106] - Sales and marketing expenses rose by 76.1% to RMB 132.4 million, mainly due to increased expenses for property sales and new African business activities[106] - Other expenses increased by RMB 135.5 million to RMB 200.4 million, largely due to higher business development activities and an administrative penalty of RMB 119.6 million[107] - Other losses increased by RMB 225.2 million to RMB 277.7 million, driven by impairment losses on receivables and goodwill, and gains from the sale of a joint venture[108] - Expected credit loss impairment decreased by RMB 50.4 million to RMB 18.5 million, with a reversal of impairment of RMB 3.8 million[109] - Interest income decreased by RMB 80.7 million to RMB 88.2 million, primarily due to a decline in loan business and reduced interest from joint ventures[110] - Financing costs decreased by RMB 108.8 million or 26.1% to RMB 307.8 million, mainly due to increased capitalized interest on construction projects[111] - Income tax expenses increased by RMB 99.4 million to RMB 268.6 million in 2023, compared to RMB 169.2 million in 2022[112] Assets and Liabilities - Total assets increased by 8.8% to RMB 32,902.9 million in 2023[3] - Net debt rose by 14.3% to RMB 8,556.1 million in 2023[3] - Property, plant, and equipment increased to RMB 20,809,466 thousand from RMB 18,195,355 thousand, reflecting a growth of 14.4%[10] - Cash and cash equivalents decreased to RMB 922,662 thousand from RMB 1,424,275 thousand, a decline of 35.2%[10] - Total assets minus current liabilities rose to RMB 23,093,195 thousand from RMB 20,764,257 thousand, indicating an 11.2% increase[11] - Non-current liabilities increased to RMB 8,925,245 thousand from RMB 7,372,506 thousand, a growth of 21.1%[11] - Total equity grew to RMB 14,167,950 thousand from RMB 13,391,751 thousand, reflecting a 5.8% increase[11] - Trade and other receivables and prepayments increased to RMB 3,175,323 thousand from RMB 2,990,695 thousand, a 6.2% rise[10] - Borrowings under current liabilities rose to RMB 3,632,813 thousand from RMB 3,156,533 thousand, a 15.1% increase[11] - Deferred tax assets decreased to RMB 165,980 thousand from RMB 190,639 thousand, a decline of 12.9%[10] - Total assets increased by 8.8% to RMB 32,902.9 million in 2023, while total equity increased by 5.8% to RMB 14,168.0 million[114] - Net debt increased to RMB 8,556.1 million in 2023 from RMB 7,487.1 million in 2022[114] - Net gearing ratio (net debt divided by equity) increased to 60.4% in 2023 from 55.9% in 2022[115] - Capital expenditures totaled RMB 3,986.1 million in 2023, primarily for maintenance, upgrades, and new production facilities in Ethiopia, the Democratic Republic of Congo, and Uzbekistan[116] - The company's total pledged assets as collateral for trade finance and bank loans amounted to RMB 6,473.5 million at the end of 2023, up from RMB 4,195.2 million in 2022[73] - The company's total pledged bank deposits increased to RMB 1,008.7 million in 2023 from RMB 561.3 million in 2022[73] - The company's property, plant, and equipment pledged as collateral increased to RMB 4,726.5 million in 2023 from RMB 3,380.4 million in 2022[73] Market and Segment Performance - China market external sales revenue was RMB 6,250,867 thousand, while overseas market external sales revenue was RMB 2,770,034 thousand, totaling RMB 9,020,901 thousand[25] - China market segment profit was RMB 355,025 thousand, and overseas market segment profit was RMB 1,014,779 thousand, totaling RMB 1,369,804 thousand[25] - Depreciation and amortization for property, plant, and equipment in the China market was RMB 964,477 thousand, and in the overseas market was RMB 305,400 thousand, totaling RMB 1,269,877 thousand[30] - Interest income for the China market was RMB 82,556 thousand, and for the overseas market was RMB 5,633 thousand, totaling RMB 88,189 thousand[30] - Financing costs for the China market were RMB 201,888 thousand, and for the overseas market were RMB 105,951 thousand, totaling RMB 307,839 thousand[30] - The company restructured its internal reporting framework, changing the basis of segment reporting from operational location to market location[22] - The company's segment reporting is based on the China market and overseas market, in accordance with IFRS 8[23] - The company's segment profit excludes items such as fair value changes of equity instruments, goodwill impairment losses, and central administrative expenses[27] - The company does not present segment assets and liabilities as the highest operational decision-maker does not regularly review this information for resource allocation and performance evaluation[28] - Total revenue for 2023 reached RMB 9,020,901 thousand, compared to RMB 8,489,135 thousand in 2022, with significant growth in the African market from RMB 1,130,732 thousand to RMB 2,710,740 thousand[34] - Depreciation and amortization expenses for property, plant, and equipment amounted to RMB 1,225,683 thousand, with the majority (RMB 1,005,777 thousand) attributed to the Chinese market[32] - Non-current assets in Africa increased to RMB 12,298,744 thousand in 2023, up from RMB 9,494,177 thousand in 2022, reflecting the company's expansion in the region[36] - The company's sales volume in Mozambique increased by 4.9% in 2023 compared to 2022, while sales in the Democratic Republic of Congo and Ethiopia contributed approximately 1.53 million tons of cement[74] - The company's average selling price in China declined in 2023 due to a decrease in cement demand, particularly in Shaanxi, Guizhou, and Xinjiang[74] - Cement sales in Shaanxi decreased by 4.1% to approximately 14.1 million tons in 2023, with the average price dropping by 17.5% to RMB 269 per ton[78] - In Xinjiang, cement sales increased by 20.3% to approximately 1.96 million tons in 2023, with the average price slightly decreasing to RMB 415 per ton[79] - In Guizhou Province, cement sales increased by 15.4% to approximately 1.05 million tons in 2023, with the average price dropping to RMB 369 per ton[79] - In Mozambique, cement and clinker sales increased by 4.9% to 1.49 million tons in 2023, with the average price rising to RMB 663 per ton[80] - The Great Lake plant in the Democratic Republic of Congo has a daily production capacity of 3,500 tons of clinker and an annual cement production capacity of 1,500,000 tons, with an expected start of production in December 2022[81] - The Great Lake plant achieved an average selling price of RMB 1,272 per ton and sold 167,000 tons of cement in 2023, with a capacity utilization rate of 11%[81] - The Ethiopia plant, acquired in 2022, has an annual production capacity of 1,300,000 tons and achieved an average selling price of RMB 872 per ton and sales of 1,360,000 tons in 2023, with a capacity utilization rate of 104%[82] Environmental and Sustainability Initiatives - The company installed waste heat recovery systems in 13 out of 19 production lines, reducing electricity consumption by 30% and CO2 emissions by 22,000 tons per million tons of cement[83] - The company reduced NOx emissions by 60% per ton of clinker in its plants in Shaanxi, Xinjiang, and Guizhou provinces through the installation of De-NOx equipment[83] - The company's Fuping plant has a municipal waste treatment facility with an annual capacity of 100,000 tons, operational since March 2016[84] - The company's Mianxian plant has a solid waste treatment facility with an annual capacity of 16,500 tons, operational since October 2017[84] - The company's Moyu plant has a solid waste treatment facility with an annual capacity of 80,000 tons, operational since August 2022[84] - The company developed an "Environmental Protection Regulations Standards Checklist" and conducted environmental inspections and training for leadership[85] - The company's safety and environment department conducted quarterly checks on self-monitoring reports, pollutant discharge permits, and environmental management accounts[85] - The company has renovated all Chinese factories into eco-friendly "garden-style" factories and is further developing them to comply with environmental policies[86] - The green limestone mining project, including land reclamation and mine greening, has commenced construction to adhere to environmental regulations[86] - The company is upgrading its facilities to meet new NOx and particulate emission standards and is promoting green mining projects[100] Financial and Operational Costs - Sales cost increased by 4.0% from RMB 6,307,300,000 in 2022 to RMB 6,560,100,000 in 2023[102] - Coal cost decreased by 15.5% from RMB 1,039 per ton in 2022 to RMB 878 per ton in 2023[102] - Total raw material cost increased by 17.8% despite only a 7.0% increase in cement sales volume[103] - Employee total cost increased by 18.9% due to increased production capacity[103] - Employee costs rose to RMB 933,081 thousand in 2023, up from RMB 776,562 thousand in 2022, with salaries and allowances making up the majority at RMB 865,719 thousand[46] - The company's R&D costs recognized as expenses decreased to RMB 335,335 thousand in 2023 from RMB 380,304 thousand in 2022, indicating a shift in R&D expenditure allocation[46] - Administrative penalty provisions increased substantially to RMB 119,616 thousand in 2023 from RMB 29,778 thousand in 2022, reflecting higher regulatory compliance costs[46] - The company's inventory cost recognized as expenses increased to RMB 5,871,954 thousand in 2023 from RMB 5,620,777 thousand in 2022, indicating higher production or procurement costs[46] - The company employed 8,297 full-time employees in 2023, up from 7,736 in 2022[117] - Employee benefits expenses increased to RMB 933.1 million in 2023 from RMB 776.6 million in 2022[117] Future Plans and Strategies - The company plans to gradually reduce capital allocation and scale down its financing lease business[87] - In 2024, infrastructure investment is expected to continue supporting cement demand, while real estate investment remains low but may improve due to policy adjustments[89] - The company will focus on international development, risk control, and cost reduction strategies in 2024[90] - The company plans to accelerate smart factory construction and improve intelligent manufacturing levels[91] - The company will strengthen talent development and optimize its workforce structure to support sustainable growth[91] - The company expects stable prices in 2024 due to limited supply caused by stricter environmental policies in Shaanxi[92] - Multiple large infrastructure projects in Shaanxi, including intercity railways and highways, are expected to commence in 2024[92] - The company anticipates stable performance in southern Shaanxi due to reasonable infrastructure projects and orderly supply[92] - In Xinjiang, the company expects stable market conditions with increased demand from ongoing infrastructure projects, including a 2,000,000-ton capacity plant in southern Xinjiang[93] - The company forecasts improved average selling prices and profit margins in 2024 due to a shift in production strategy towards higher-value specialty cement[93] - In Mozambique, the company plans to focus on cement and clinker sales in the central and northern regions, as well as exports to South Africa, Zimbabwe, and Madagascar in 2024[94] - The company expects strong demand in the Democratic Republic of Congo, with its Great Lakes plant aiming to capture the market through stable quality and competitive pricing[94] - Ethiopia's strong cement demand is driven by major projects in Addis Ababa, Amhara, and Oromia regions, with expected increases in both sales volume and average selling prices[95] - The company is constructing a new 10,000-ton per day clinker production line in Ethiopia, with an annual cement production capacity of 5,000,000 tons, expected to start operations in Q2 2024[96] - The Ethiopia project has received government support, including preferential income tax, land provision, and mining resources, positioning the company for long-term market expansion[96] - The company is constructing a new cement production line in Uzbekistan with a daily capacity of 6,000 tons of clinker, expected to start production in Q2 2024[98] - The company plans to implement cost control measures in 2024 to manage sales costs and administrative expenses[99] Corporate Governance and Compliance - The company applied new and revised International Financial Reporting Standards (IFRS) effective from January 1, 2023, with no significant impact on financial performance[12] - The company has not yet applied the temporary exception for the second pillar tax rules due to the absence of relevant legislation in its operating jurisdictions[13] - The company adopted revised International Financial Reporting Standards (IFRS) for the first time in the current year, with no significant impact on financial performance[16] - The company is evaluating the potential impact of the revised IAS 21 on its financial position and overseas operations, effective from January 1, 2025[19] - Revenue recognition for construction and installation services is based on the progress of service completion, while other revenues are recognized upon transfer of control to customers[21] - The company's financial assets and liabilities are primarily denominated in RMB, with some long-term payables and preferred notes in USD, and intercompany balances in non-convertible currencies such as Metical and Ethiopian Birr, exposing the company to significant foreign exchange risk[119] - The company has not established a foreign currency hedging policy but will continue to monitor and consider hedging foreign exchange risks as needed[119] - The company's credit risk primarily arises from trade receivables and loans, with measures in place to mitigate risks through credit assessments and regular reviews of receivables[120]

智通财经APP获悉，西部水泥(02233)再涨超5%，2月初至今累涨70%，截至发稿，涨6%，报1.06港元， 成交额2889.45万港元。 长江证券指出，非洲城镇化率较低，同时生育率高于全球其他地区，人口红利支撑基本建设潜力较充 沛。非洲水泥是一个大市场，且其价格较高，国内企业进军非洲，具备成本管理等综合优势，利润空间 显著。拉豪和海德堡作为当地龙二龙三，目前在战略退出，为国内企业进入也提供了空间。目前在非洲 布局的水泥企业主要是华新水泥与西部水泥，关注产能持续扩张的成长性。 天风证券此前指出，23年我国水泥出海速度明显加快，该行指出，从上市公司收入情况及占比来看，西 部水泥增长最为明显，且西部水泥当前在建项目最多，合计产能达到1054万吨，海外增长弹性或最大。 ...

Financial Performance - Total sales volume of cement and clinker increased by 4.3% to 9.54 million tons in the first half of 2023 compared to 9.15 million tons in the same period of 2022[4] - Revenue for the first half of 2023 was RMB 4,398.3 million, representing a 5.9% increase from RMB 4,152.3 million in the first half of 2022[4] - Gross profit decreased by 8.8% to RMB 1,234.2 million, with a gross margin of 28.1%, down from 32.6%[4] - EBITDA for the first half of 2023 was RMB 1,517.2 million, a decline of 10.2% from RMB 1,690.1 million in the previous year[4] - Net profit attributable to shareholders decreased by 19.1% to RMB 532.2 million, with basic earnings per share of RMB 0.098, down from RMB 0.121[4] - The overall profit stability in the first half of 2023 was attributed to cost control measures and efficiency improvements despite lower average selling prices in China[7] - The company reported a net profit of RMB 532,160,000 for the first half of 2023, a decrease from RMB 658,151,000 in the same period of 2022, representing a decline of approximately 19.1%[77] - The company reported a basic and diluted earnings per share of RMB 0.098, compared to RMB 0.121 in the previous year, a decline of about 18.9%[74] Sales and Market Trends - In the first half of 2023, the average selling price of cement in Shaanxi decreased by approximately 16.1% to RMB 303 per ton, compared to RMB 361 per ton in 2022[8] - Cement sales volume in Shaanxi slightly decreased by about 4.4% to approximately 6,530,000 tons, down from 6,830,000 tons in 2022[8] - In Xinjiang, cement sales volume decreased by 9.3% to approximately 880,000 tons, with an average selling price dropping to RMB 415 per ton from RMB 442 per ton in 2022[9] - In Guizhou, cement sales volume increased by approximately 35.9% to about 530,000 tons, with an average selling price of RMB 385 per ton, down from RMB 429 per ton in 2022[9] - The Mozambique plant's cement sales volume increased by 1.3% to approximately 740,000 tons, with an average selling price rising to RMB 638 per ton from RMB 509 per ton in 2022[10] - The Democratic Republic of the Congo's plant recorded an average selling price of RMB 1,509 per ton, with a sales volume of 39,000 tons, marking its first sales since the plant's launch[11] - In Ethiopia, the average selling price of cement was RMB 875 per ton, with a sales volume of 660,000 tons, achieving a capacity utilization rate of approximately 101%[12] - The company anticipates moderate demand growth in the second half of 2023, driven by several large infrastructure projects commencing[25] - The government is expected to maintain stable prices in the second half of 2023 due to stricter environmental policies limiting supply[25] Cost Management and Efficiency - The company continues to implement efficiency improvements and cost-saving measures to maintain profitability amid challenging market conditions[6] - The company is implementing cost reduction measures in 2023 to control sales costs and administrative expenses[31] - The average cost of coal decreased from approximately RMB 980 per ton in H1 2022 to RMB 975 per ton in H1 2023[36] - The company has installed waste heat recovery systems in 14 out of 20 production lines, reducing electricity consumption by approximately 30% and CO2 emissions by about 22,000 tons per million tons of cement produced[16] - The company has achieved a 60% reduction in nitrogen oxide (NOx) emissions per ton of clinker through the installation of De-NOx equipment across all plants in Shaanxi, Xinjiang, and Guizhou provinces[16] - The company has completed upgrades to meet new particulate matter emission standards across all plants, enhancing compliance with air pollution regulations in the cement industry[16] Assets and Liabilities - Total assets increased by 3.4% to RMB 31,266.0 million, while total liabilities rose by 9.2% to RMB 8,174.6 million[5] - The net debt-to-equity ratio increased to 60.1%, up from 55.9%[5] - The company's total liabilities increased to RMB 9,960,894 thousand from RMB 9,474,996 thousand, reflecting a rise of approximately 5.1%[76] - The company's net asset value rose to RMB 13,595,719 thousand from RMB 13,391,751 thousand, indicating an increase of about 1.5%[76] Employee and Governance - As of June 30, 2023, the company employed 8,780 full-time employees, an increase from 7,299 in the previous year[20] - Employee benefits expenses amounted to RMB 392,700,000 for the first half of 2023, compared to RMB 381,800,000 in the same period of 2022[20] - The company has established a Remuneration Committee to review the remuneration policies for directors and senior management[68] - The Nomination Committee is responsible for identifying and recommending candidates for the board[69] - The company is committed to maintaining high standards of corporate governance and transparency to maximize shareholder returns[65] Future Outlook and Strategy - The company aims to enhance its international development strategy and improve overseas project management mechanisms[24] - The focus on green and low-carbon sustainable development will drive increased investment in pollution reduction and energy-saving technologies[24] - The company plans to optimize its governance structure and enhance talent development strategies to support high-quality growth[24] - The company plans to start production at the new cement plant in Ethiopia with a capacity of 5,000,000 tons per year in Q1 2024[29] - A new cement production line in Uzbekistan is expected to produce 2,400,000 tons annually, also starting in Q1 2024[30] Shareholder Information - As of June 30, 2023, Zhang Jimin holds 1,756,469,900 shares, representing 32.29% of the company's issued share capital[49] - As of June 30, 2023, Anhui Conch Cement Co., Ltd. holds 1,584,849,970 shares, representing 29.14% of the company's issued share capital[52] - The total number of unexercised options under the post-IPO share option plan is 46,600,000 shares, which is approximately 0.86% of the company's issued share capital as of the mid-term report date[57] - The maximum number of shares that can be issued under the post-IPO share option plan is capped at 411,533,185 shares, equivalent to 10% of the issued share capital as of August 23, 2010[57] - The company aims to incentivize eligible participants through the post-IPO share option plan to enhance performance and retain talent[55] Compliance and Audit - The company’s financial statements for the six months ended June 30, 2023, were reviewed by Deloitte, confirming no significant issues were found[73] - The board confirmed compliance with all corporate governance code provisions as per the Hong Kong Stock Exchange Listing Rules for the six months ended June 30, 2023[65] - The Audit Committee has reviewed the unaudited consolidated interim results for the six months ended June 30, 2023[67]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容 概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就 因本公佈全部或任何部分內容而產生或因依賴該等內容而引致的任何損 失承擔任何責任。 WEST CHINA CEMENT LIMITED 中 國 西 部 水 泥 有 限 公 司 （於澤西註冊成立的有限公司，註冊編號94796） （股份代號：2233） 二 零 二 三 年 中 期 業 績 公 佈 財務摘要 截至 截至 二零二三年 二零二二年 六月三十日 六月三十日 變動 人民幣百萬元（除另有指明外） 止六個月 止六個月 百分比 （未經審核） （未經審核） 水泥及熟料總銷售量（百萬噸） 9.54 9.15 4.3% 水泥銷售量（百萬噸） 9.14 8.70 5.1% 骨料銷售量（百萬噸） 2.06 2.30 (10.4%) ...