GF SECURITIES·2026-03-31 11:49Investment Rating - The investment rating for the company is "Buy-A/Buy-H" with a current price of 23.42 CNY and a reasonable value of 30.16 CNY for A-shares and 30.09 HKD for H-shares [4]. Core Views - The company reported a net profit attributable to shareholders of 8.1 billion CNY in 2025, representing a year-on-year increase of 5.4%. The net profit for Q4 was 1.81 billion CNY, down 27.6% year-on-year and 6.6% quarter-on-quarter [8][9]. - The company benefits from a decline in coal prices, leading to a slight increase in profitability for cement, while aggregate and concrete gross profits decreased by 2.4% [10]. - Capital expenditures are expected to decrease, with a cash dividend of 4.486 billion CNY in 2025, reflecting a slight increase in the dividend payout ratio to 55% [13]. - The company is projected to have a net profit of 9.1 billion CNY in 2026, with corresponding P/E ratios of 13.5, 11.0, and 9.5 for 2026, 2027, and 2028 respectively [14]. Summary by Sections Financial Performance - Revenue for 2025 was 82.532 billion CNY, with a growth rate of -9.3%. EBITDA was 17.534 billion CNY, and net profit attributable to shareholders was 8.113 billion CNY, with a growth rate of 5.4% [2][18]. - The company’s earnings per share (EPS) for 2025 was 1.53 CNY, with a projected increase to 1.71 CNY in 2026 [18]. Business Segments - Cement and clinker sales volume in 2025 was 265 million tons, down 1.13% year-on-year, with an average price of 230 CNY per ton, a decrease of 16 CNY year-on-year [10]. - Aggregate revenue was 4.2 billion CNY, down 10% year-on-year, while concrete revenue increased by 20% to 3.2 billion CNY, with a gross profit margin of 12.4% [10]. Capital Expenditure and Dividends - Capital expenditure for 2025 was 11 billion CNY, with a planned increase to 11.8 billion CNY in 2026, significantly lower than the levels from 2021 to 2024 [13]. - The company’s cash dividend for 2025 was 4.486 billion CNY, with a payout ratio of 55%, indicating a slight increase from the previous year [13]. Profitability Outlook - The company is expected to maintain a net profit of approximately 30 CNY per ton in 2024-2025, with a potential improvement in profitability in 2026 due to supply-side adjustments [13][14].