SHANGFENG CEMENT(SZ:000672) Dongguan Securities·2025-12-29 12:15Investment Rating - The report assigns an "Accumulate" rating for the first time [2]. Core Insights - The company is driven by dual engines of "building materials" and "new economic investments," indicating a promising future [4][36]. - The cement business remains robust, with industry-leading profitability metrics, providing a solid performance foundation [4][13]. - The company has entered a harvest phase for its equity investments, particularly in semiconductor, new energy, and new materials sectors, which are expected to mitigate cyclical risks and foster new growth engines [30][36]. - The company has shown a significant recovery in performance, with net profit for the first three quarters of 2025 reaching 5.51 billion, a year-on-year increase of 45.9% [37]. - The company maintains a generous dividend policy, with a commitment to distribute at least 35% of net profit as cash dividends, translating to a dividend yield of approximately 3.47% based on current market capitalization [42]. Summary by Sections Company Overview - Gansu Shafeng Cement Co., Ltd. primarily engages in the production and sale of cement and related building materials, with a focus on optimizing resources and expanding into related industries [11]. Cement Business Stability and Profitability - The traditional cement business, despite facing industry cycles, has maintained high gross margins and return on equity (ROE), positioning the company favorably within the industry [4][13]. - In 2024, cement and related materials accounted for 96.72% of total revenue, with cement alone contributing 70.55% [13]. Equity Investment Harvest Phase - The company has strategically invested over 1.7 billion in key technology sectors, with equity investments contributing approximately 31% to net profit in the first three quarters of 2025 [30][36]. Performance Recovery - The company reported a net profit of 5.51 billion for the first three quarters of 2025, marking a significant recovery from previous years [37]. Generous Dividend Policy - The company has a history of consistent dividend payouts, with a planned minimum cash dividend of 4 billion annually for 2025-2026, reflecting a strong commitment to shareholder returns [42]. Investment Outlook - The report forecasts earnings per share (EPS) of 0.72, 0.87, and 0.92 for 2025, 2026, and 2027 respectively, indicating a positive growth trajectory [43].