SHANGFENG CEMENT(SZ:000672) Yin He Zheng Quan·2025-08-28 08:03Investment Rating - The report maintains a "Recommended" rating for the company [1][4]. Core Views - The company's main business in building materials shows stable profitability, while investments in new economies add growth momentum [3]. - The company reported a significant improvement in Q1 performance, driven by dual engines of core business and new economic investments [3]. - The company is positioned as a leading player in the cement industry in East China, with advantages in brand, technology, regional layout, and cost control [3][4]. Financial Performance Summary - In H1 2025, the company achieved operating revenue of 2.272 billion yuan, a year-on-year decrease of 5.02%, while net profit attributable to shareholders increased by 44.53% to 247 million yuan [3]. - The sales volume of cement in H1 2025 was 7.0308 million tons, down 3.10% year-on-year, with an average selling price up 0.34% [3]. - The gross profit margin for cement and clinker improved due to a 23% year-on-year decrease in coal prices, with H2 2025 expected to see a gross margin of 31.80%, up 6.38 percentage points year-on-year [3]. - The company’s new economic equity investment business generated investment income of 4.02 million yuan in H1 2025, focusing on the semiconductor and new materials industries [3]. - Operating cash flow for H1 2025 was 476 million yuan, a year-on-year increase of 23.99%, indicating a strong cash flow position [3]. Future Outlook - The company has a five-year development plan (2025-2029) focusing on a business structure of "one main and two wings," which includes cement and building materials as the main business, and extending the industrial chain and new economic equity investments as the two wings [3]. - The company expects steady growth in performance, with projected net profits for 2025-2027 at 700.65 million, 790.57 million, and 876.95 million yuan respectively, with corresponding earnings per share of 0.72, 0.82, and 0.90 yuan [5][7].