Core Viewpoint - The company reported a revenue of 5.45 billion yuan for 2024, a year-on-year decrease of 14.8%, with net profit attributable to shareholders at 630 million yuan, down 15.7% [1] Group 1: Financial Performance - The company achieved a revenue of 950 million yuan in Q1 2025, up 4.6% year-on-year, and a net profit of 80 million yuan, up 447.6% year-on-year [1] - The sales volume of cement clinker in 2024 was 20.75 million tons, a decrease of 3.3%, which was better than the national average decline of 9.5% [2] - The average price per ton of cement clinker was 230 yuan, down 19 yuan year-on-year, with a gross profit per ton of 55 yuan, down 5 yuan [2] Group 2: Cost Management and Profitability - The company maintained a gross margin of 26.2% in 2024, a decrease of 1.6 percentage points year-on-year, but the gross margin for Q1 2025 improved to 27.4%, an increase of 1.2 percentage points from the previous year [2][3] - The company has been actively reducing costs and increasing efficiency, leading to a significant decrease in fuel and other costs [2] Group 3: Balance Sheet and Future Planning - As of the end of 2024, the company had cash and financial assets totaling 2.67 billion yuan and a debt-to-asset ratio of 45.1%, down 1.44 percentage points year-on-year [4] - The new five-year plan aims for production capacity increases in cement, clinker, and aggregates by 2029, with targets of 30 million, 20 million, and 40 million tons respectively [4] - The company plans to maintain a dividend payout ratio of no less than 35% or 400 million yuan annually from 2024 to 2026, with a current dividend yield of 7.5% [4] Group 4: Profit Forecast and Valuation - The company has revised its profit forecasts for 2025-2027, expecting net profits of 740 million, 790 million, and 850 million yuan respectively, reflecting increases of 16.8% and 16.5% compared to previous estimates [5] - The target price for the company has been raised by 23% to 10.31 yuan, based on a price-to-book ratio of 1.1 times for 2025 [5]

"全国水泥行业在政策引导、行业自律强化等多重因素推动下，'反内卷'进程取得阶段性成效。"数字水 泥网发布的最新经济运行报告显示，今年一季度，水泥行业需求端下滑幅度减缓，价格同比明显回升， 叠加煤炭成本下降带动成本下移，预计一季度行业利润将达到15亿—20亿元，同比扭亏。 陈柏林向记者表示，在"稳增长"政策基调下，二季度货币政策延续适度宽松取向，财政政策进一步加力 提效。专项债发行节奏加快，基建项目资本金比例下调等政策组合拳持续发力，预计基建投资增速将保 持持续回升，为水泥需求提供坚实支撑，国内水泥市场需求环比、同比均将继续回升。 陈柏林认为，一季度全国水泥市场竞争环境改善有三大支撑因素，一是需求端下滑幅度减缓，超预期， 一季度全国水泥产销量同比跌幅在2%以内，优于去年同期；二是供给端精准调控；三是行业共识强 化，在"反内卷"政策的引导下，各地水泥企业形成"保利润"共识，恶性竞争明显减少。 从月度走势看，1月，全国水泥市场价格延续上年四季度行情，在高位盘整，成交价为404元/吨，高于 去年同期32元/吨；2月，尽管受淡季因素影响，价格出现回落，但由于企业积极开展错峰生产和行业自 律措施，价格环比仅小幅回落10元 ...

Investment Rating - The investment rating for the company is "Buy" [12] Core Insights - The company reported a significant decline in revenue for 2024, with total revenue of 91.03 billion yuan, down 35.51% year-on-year, and a net profit attributable to shareholders of 7.696 billion yuan, down 26.19% year-on-year. However, Q4 showed signs of recovery with a net profit of 2.498 billion yuan, up 42.27% year-on-year despite a revenue decline of 45.53% [4][5] - The company has strengthened its production scheduling, leading to a notable improvement in profitability in Q4, with a gross margin increase of 15.7 percentage points to 28.2% [5] - The company’s market share in cement production has continued to rise, with self-produced cement sales of 26.8 million tons in 2024, a decrease of 6.1% year-on-year, while the national cement production fell by 9.5% [5] - For 2025, demand is expected to improve slightly, supported by increased infrastructure spending and the issuance of special bonds, which may enhance overall demand for cement [5] - The company plans to maintain a dividend payout ratio of no less than 50% from 2025 to 2027, with a strong cash flow of 18.5 billion yuan in 2024 and planned capital expenditures of 11.98 billion yuan for 2025 [6] - Revenue projections for 2025 and 2026 are 103.7 billion yuan and 105.4 billion yuan, respectively, with expected net profits of 9.378 billion yuan and 9.772 billion yuan, indicating growth rates of 21.9% and 4.2% [6][8] Financial Summary - The company’s total market capitalization is 128.7 billion yuan, with a total share capital of 5.299 billion shares and a circulating share capital of 4 billion shares [3] - The company’s price-to-earnings ratio (P/E) is 12.33, with a debt-to-asset ratio of 19.6% [3] - The projected earnings per share (EPS) for 2025 and 2026 are 1.77 yuan and 1.84 yuan, respectively [8][11]

Summary of Conference Call on Cement Industry Industry Overview - The conference focuses on the cement industry, highlighting its challenges and future outlook [1][2][3]. Key Points and Arguments 1. **Demand Decline**: The cement industry is expected to experience a continuous decline in demand over the next five to ten years, with a significant drop from 2.4 billion tons in 2021 to approximately 700 million tons, representing nearly a 25% decrease [2][3]. 2. **Historical Demand Trends**: From 2014 to 2021, the cement demand remained stable at around 2.4 billion tons, but began to decline in 2022 due to decreased real estate activity and infrastructure investment [2][3]. 3. **Long-term Demand Projection**: Long-term demand is projected to stabilize at around 1 to 1.2 billion tons, which is about half of the peak demand levels [3][4]. 4. **Capacity Utilization Issues**: Despite nominal capacity utilization rates being reported at over 60%, actual utilization may be as low as 53% by 2024, indicating significant overcapacity in the industry [4][5]. 5. **Need for Capacity Reduction**: The industry must undergo capacity reduction to achieve healthy development, as past attempts at supply-side reforms have not effectively reduced capacity [3][5]. 6. **Historical Context of Capacity Management**: The industry has seen attempts to manage capacity through policies like capacity replacement and peak-shaving production, but these have often resulted in nominal increases in capacity rather than reductions [6][7][9]. 7. **Regional Capacity Shifts**: There has been a trend of shifting excess capacity from regions with declining demand (e.g., Northeast China) to areas with higher demand (e.g., Guangxi, Hubei) [7][8]. 8. **Policy Challenges**: The effectiveness of policies aimed at reducing capacity has been undermined by industry responses that circumvent regulations, leading to a situation where actual capacity may not decrease as intended [9][10]. 9. **Profitability through Peak-Shaving**: The cement industry has managed to maintain profitability through peak-shaving production strategies, even at low capacity utilization rates, with prices increasing significantly during periods of limited supply [11][12]. 10. **Future Outlook**: The industry faces increasing cost pressures, particularly for smaller enterprises, necessitating further consolidation and capacity reduction to return to a state of supply-demand balance [13][14]. Other Important Insights - The cement industry has unique characteristics that allow for effective peak-shaving strategies, supported by government policies aimed at reducing carbon emissions and pollution [11][12]. - The long-term sustainability of profitability through peak-shaving is questionable, as demand continues to decline, necessitating a more robust approach to capacity management [13][14].

Core Viewpoint - The cement industry is experiencing a price surge driven by stable demand from infrastructure projects and coordinated supply-side measures, alongside a decline in coal costs that supports profit recovery [1][7]. Demand Side - The National People's Congress has increased fiscal funding, leading to a steady release of infrastructure demand. As of February 27, 2025, the national construction site resumption rate was 64.6%, with a labor arrival rate of 61.7% and a funding availability rate of 49.1% [3]. - Despite a slight year-on-year decline in construction site resumption rates post-Spring Festival, recent weeks have shown significant improvement. Predictions indicate a 35%-40% growth in small excavator sales in January-February 2025, supporting future construction demand [3]. - The government plans to increase the deficit ratio to around 4% and issue 4.4 trillion yuan in local government special bonds, focusing on investment construction and debt resolution [3]. Supply Side - The staggered production shutdowns have been extended, with key regions like Zhejiang, Anhui, and Fujian experiencing increased shutdown durations compared to the previous year. As of February 27, 2025, the clinker inventory ratio was at 45%, down 23 percentage points year-on-year [4]. - The average annual shutdown days for provinces with announced staggered production plans is projected to reach 189 days, indicating a potential for further reductions in supply pressure due to enhanced cooperation among enterprises [4]. Profitability - The average price of cement (P.O42.5, bulk) in January-February 2025 was 342.56 yuan/ton, an increase of 20.25 yuan/ton year-on-year. The decline in coal prices has further released profit margins, with the average price of thermal coal down by 172.16 yuan/ton [5]. - As of March 1, 2025, the national average cement price was 338.20 yuan/ton, up 18.50 yuan/ton from the previous year, indicating a high elasticity in gross profit for major companies due to recent price increases [5].