Xin Lang Zheng Quan·2025-07-21 09:53Core Viewpoint - The company, Conch Cement, faces significant challenges due to a combination of cyclical downturns in the industry and structural adjustments, leading to a substantial decline in revenue and profit in 2024 [1] Group 1: Financial Performance - In 2024, Conch Cement achieved operating revenue of 91.03 billion yuan, a significant decrease of 35.51% year-on-year; net profit attributable to shareholders was 7.70 billion yuan, down 26.19% year-on-year [1] - The main business revenue was 74.16 billion yuan, reflecting a year-on-year decline of 14.18%, primarily due to ongoing pressure from falling product prices [1] Group 2: Market Challenges - The core business of Conch Cement is under severe pressure from weak domestic real estate investment and slowing infrastructure growth, which directly undermines demand in the cement market [2] - Despite maintaining a relatively stable gross margin through cost control, the simultaneous decline in both volume and price has significantly impacted profitability [2] - The industry is plagued by overcapacity, leading to persistent low-price competition risks, forcing companies into a passive position of "letting profits go to maintain volume" [2] Group 3: New Business Developments - The aggregate and manufactured sand business showed strong performance, generating revenue of 4.69 billion yuan, a year-on-year increase of 21.40%, with a gross margin of 46.91%, surpassing the main cement business's 24.51% [3] - Conch Cement is actively expanding into aggregates, commercial concrete, and overseas markets, as well as green energy, but the aggregate business currently accounts for less than 10% of total revenue, making it a short-term performance pillar [3] - Overseas projects in Cambodia and Uzbekistan have been initiated, but challenges such as geopolitical risks, local operational pressures, and long return cycles limit their contribution to growth [3] Group 4: Strategic Imbalance - The company attempts to hedge risks in its main business through diversification, but resource allocation reveals contradictions, such as cutting capital expenditure in the cement sector while directing resources to non-core areas [4] - In 2024, the company significantly increased fixed deposits while issuing bonds, reflecting insufficient cash generation capability from new businesses and low capital utilization efficiency [4] - This "broad net" approach without "deep roots" in expansion makes the transformation appear more as a stopgap measure rather than a sustainable strategic overhaul [4]