Investment Rating - The industry view is rated as Attractive, with a preference for gold, cement, building materials, and steel for 2Q25 [7]. Core Insights - Demand in the materials sector showed signs of recovery in 1Q25, but the outlook for 2Q25 is uncertain due to tariff concerns. Domestic excavator sales increased by 38% YoY, and orders from cathode producers rose by 20% due to strong demand from electric vehicles (EV) and energy storage [2]. - The report anticipates that metals-related stocks may outperform in 2H25 as further stimulus is expected [1][6]. - The tariff impact is projected to weigh heavily on the materials space, with a forecasted GDP growth reduction of 30 basis points to 4.2% for 2025 due to tariff shocks and domestic demand impacts [2][18]. Summary by Sections Gold - Gold is identified as the top pick within commodities, supported by ongoing central bank buying and rising ETF inflows. Lower Treasury yields are expected to enhance gold's macro backdrop. Preferred stocks include Zhaojin (1818.HK) and Zijin Mining (2899.HK, 601899.SS) [3]. Cement and Steel - Cement supply-side controls were announced in November 2024, leading to a focus on profitability rather than price wars. The report expects a significant increase in gross profit per ton due to lower coal prices and higher cement prices. For steel, a production cut of 30 million tons and an export cut of 15-20 million tons are anticipated in 2025. Preferred stocks include Anhui Conch (0914.HK, 600585.SS), CNBM (3323.HK), and Baosteel (600019.SS) [4]. Copper and Aluminum - In 2H25, copper and aluminum are expected to outperform due to continued demand from grid and EV-related green infrastructure. Additional fiscal stimulus could further support demand. Preferred stocks include Zijin (2899.HK, 601899.SS), CMOC (3993.HK, 603993.SS), and Hongqiao (1378.HK) [5]. Tariff Impact - The report highlights that the current cumulative US tariffs could have a more significant growth drag than in 2018-19, with expectations of trade talks to lower tariffs to 34% by year-end. The tariff shocks are expected to impact both trade channels and domestic demand [17][18].

Core Viewpoint - The company has developed a valuation enhancement plan for 2025 to improve its overall value and investment valuation, aiming for sustainable growth and high-quality development in response to market conditions and internal strategies [4][14]. Group 1: Triggering Conditions and Procedures - The company has been required to formulate a valuation enhancement plan due to its stock price being below the audited net asset value per share for 12 consecutive months [2]. - The board of directors approved the 2025 valuation enhancement plan on April 23, 2025 [3]. Group 2: 2025 Valuation Enhancement Plan - The plan aims to clarify strategic paths for growth, transitioning from a "dual-wheel" to a "three-horse" model, focusing on core business, new economic investments, and second growth curve businesses [4][5]. - The company has maintained resilient growth in its main product capacity and revenue, with cumulative tax payments of approximately 5.1 billion yuan and cash dividends of 2.65 billion yuan, achieving an average annual dividend rate exceeding 40% [4]. Group 3: Business Quality Improvement and Innovation - The company has established a high-efficiency operational mechanism in the cement and building materials industry, maintaining competitive advantages even during downturns [6][7]. - The focus will be on enhancing quality and efficiency through smart, ecological, and high-end upgrades, while also improving product structure and resource allocation [7]. Group 4: Capital Integration and Second Growth Curve - The company has invested over 1.7 billion yuan in equity investments, particularly in semiconductors, new energy, and new materials, achieving significant returns [8]. - The five-year plan outlines a framework for developing new business directions, including silicon-based and carbon-based materials, and emphasizes the integration of industry and capital resources [8]. Group 5: Governance and Incentive Mechanisms - The company will enhance its governance structure and internal control systems, ensuring compliance with regulations and improving management capabilities [9]. - An employee stock ownership plan has been implemented to align management incentives with company valuation [9]. Group 6: Shareholder Returns and Social Responsibility - The company has distributed approximately 3.819 billion yuan in dividends since its restructuring, with a new dividend plan proposing a minimum of 35% of net profit for cash dividends from 2024 to 2026 [10]. - The company aims to enhance its social responsibility through annual ESG reports and by optimizing its dividend strategy to increase shareholder satisfaction [11]. Group 7: Communication and Transparency - The company plans to strengthen investor relations by proactively disclosing operational and strategic information, ensuring fair treatment of all shareholders [12]. - Regular communication activities will be organized to engage with investors and analysts, enhancing confidence in the company's performance [12]. Group 8: Evaluation of the Valuation Enhancement Plan - The company will assess the implementation of the valuation enhancement plan annually, especially if it remains in a long-term undervalued situation [13].

Investment Rating - The industry view is rated as Attractive, with a preference for gold, cement, building materials, and steel for 2Q25 [7]. Core Insights - Demand in the materials sector showed signs of recovery in 1Q25, but the outlook for 2Q25 is uncertain due to tariff concerns [2]. - The report anticipates that metals-related stocks may outperform in 2H25 as further stimulus is expected [1][6]. - The impact of tariffs is projected to lower China's 2025 real GDP forecast by 30 basis points to 4.2% [2][18]. Summary by Sections Gold - Gold is identified as the top pick within commodities, supported by ongoing central bank buying and rising ETF inflows [3]. - Lower Treasury yields are expected to enhance gold's macro backdrop [3]. Cement and Steel - Cement supply-side controls were announced in November 2024, leading to a focus on profitability rather than price wars [4]. - A production cut of 30 million tons and an export cut of 15-20 million tons for steel is anticipated in 2025 [4]. Metals - In 2H25, copper and aluminum are expected to outperform due to continued demand from grid and EV-related infrastructure [5]. - The report notes that aluminum will benefit from margin expansion amid limited supply increases [5]. Tariff Impact - The cumulative US tariffs are expected to have a more significant growth drag compared to the 2018-19 period, with a projected weighted average tariff hike on China reaching 34% by year-end [17]. - The tariff shocks are anticipated to affect both trade channels and domestic demand, contributing to a GDP growth reduction of 90 basis points [18].

CITI'S TAKE Materials demand in 1Q25 was mostly in line with our expectation, with stronger prints on steel and cement, and weaker on coal. As the trade war between the US and China escalates, we assess the impact from trade disruptions and potential RMB depreciation on materials. We believe the impact of tariffs has already kicked in for the battery supply chain (see note) and expect more to be felt through commodities in the coming months. This should call for more decisive policies from Chinese side to b ...

Summary of Conference Call on China Commodities Industry Overview - The conference call primarily discusses the impact of tariffs on the China commodities sector, particularly focusing on steel, metals, and agricultural commodities [1][2][4]. Key Points and Arguments 1. **Tariff Impact on China**: - President Trump's announcement of "reciprocal" tariffs resulted in an estimated increase of 26 percentage points in the average effective US tariff rate on China, raising the total effective tariff rate on Chinese goods to 58% [1]. - In retaliation, China imposed a 34 percentage point tariff increase on all US exports, along with an additional 10-15% increase on agricultural imports from the US [1]. 2. **Demand Elasticity and Risks**: - The analysis indicates a modest downside risk to Chinese demand for steel, aluminum, and copper due to demand elasticity in response to higher finished goods prices, with potential for deeper impacts if a recession occurs [2]. 3. **Indirect Exports and Demand Softening**: - Indirect exports of Chinese commodities to the US account for 1.3% of steel production, 0.7% of aluminum, and 1.5% of copper. A 30% reduction in exports to the US could lead to a 0.2-0.5% softening in Chinese demand [3]. - The potential for a global recession could further reduce demand by an additional 0.7-1.5% [3]. 4. **Agricultural Commodities and Inflation**: - The higher tariffs imposed by China on US goods are expected to add inflationary pressure to major grains. US agricultural imports account for 21% of China's total soybean imports and 15% of corn imports [4]. - However, inflation levels may be modest due to a strong harvest year in Brazil and weak domestic demand for animal protein [4]. 5. **Export Reliance and Production**: - Direct exports of hard commodities from China to the US are minimal, with estimates of only 0.1% for steel and 0.6% for fabricated aluminum products in 2024 [11]. - The exposure of Chinese commodities to US exports is significant, translating to related demand for copper, steel, and aluminum at 1.5%, 1.3%, and 0.7% respectively [18]. 6. **Future Projections**: - The soybean import into China is projected to reach 95.8 million tons in 2024/25, which is 9 million tons lower than the previous year, reflecting weak domestic protein demand [19]. - Brazil's soybean output is expected to reach record levels, potentially offsetting some inflationary pressures from tariffs [19]. Additional Important Insights - The conference highlights the importance of monitoring supply discipline in oversupplied sectors, particularly steel, and the need for potential stimulus on demand [3]. - The analysis suggests that while tariffs have a significant impact, alternative supply factors and domestic demand trends will also play crucial roles in shaping the market dynamics [19]. This summary encapsulates the critical insights from the conference call regarding the implications of tariffs on the China commodities market, focusing on both immediate impacts and longer-term projections.

Summary of China Resources Building Materials Conference Call Company Overview - **Company**: China Resources Building Materials (1313.HK) - **Industry**: Greater China Cement Key Financial Metrics - **FY24 Profit**: Reported profit of Rmb211 million, within the earnings alert range of Rmb180-245 million [1] - **4Q24 Net Loss**: Rmb98 million attributed to impairments in concrete, aggregate, and other businesses [1] - **Final Dividend**: HK$0.01 per share, with a full-year dividend of HK$0.03 per share, resulting in a payout ratio of approximately 92% [2] - **Gearing Ratio**: Decreased by 2.3 percentage points year-over-year to 34.6% due to Rmb1 billion loan repayment [2] - **Operating Cash Flow**: Slight decline of 2% year-over-year to approximately Rmb3.8 billion [2] - **Capital Expenditure**: Planned Rmb2.5 billion for 2025, down from Rmb4.8 billion in 2024 [2] Operational Performance - **Cement and Clinker ASP**: Increased by approximately Rmb22 per ton quarter-over-quarter to Rmb259 per ton in 4Q24 [3] - **Gross Profit per Ton**: Increased by approximately Rmb20 per ton quarter-over-quarter [3] - **Shipment Volume**: Declined by 19% year-over-year in 4Q24 due to weaker demand [3] Detailed Operational Metrics - **Sales Volume**: - Cement & Clinker: 15.9 million tons in 4Q24, down 19% year-over-year [4] - Concrete: 2.8 million cubic meters in 4Q24, up 52% year-over-year [4] - **Average Selling Price (ASP)**: - Cement & Clinker: Rmb259 per ton, up 9% year-over-year [4] - Concrete: Rmb320 per cubic meter, down 14% year-over-year [4] - **Unit Cost**: - Cement & Clinker: Rmb206 per ton, down 6% year-over-year [4] - Concrete: Rmb284 per cubic meter, down 12% year-over-year [4] - **Gross Profit Margin**: 16.5%, a decrease of 10.6 percentage points year-over-year [4] Market Outlook - **Stock Rating**: Overweight with a price target of HK$2.30, representing a 32% upside from the current price of HK$1.74 [6] - **EPS Forecast**: Expected to increase from Rmb0.09 in FY23 to Rmb0.28 in FY26 [6] - **Revenue Projections**: Expected to stabilize around Rmb23 billion in FY25 [6] Risks and Considerations - **Upside Risks**: Stronger-than-expected property demand could lead to smoother price cuts in the slow season [11] - **Downside Risks**: Slowing property demand in key regions like Guangdong and Guangxi may weaken pricing [11] Additional Insights - **Dividend Yield**: Projected to increase from 3.0% in FY24 to 8.7% in FY26 [6] - **Leverage**: Expected to decrease from 30.7% in FY24 to 26.0% by FY26 [6] This summary encapsulates the key points from the conference call regarding China Resources Building Materials, highlighting financial performance, operational metrics, market outlook, and associated risks.

Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations will be holds, indicating a cautious approach to market conditions and a belief that only a small fraction of companies are suitable for buying at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, highlighting the need for readers to conduct their own due diligence [2][3]

Financial Data and Key Metrics Changes - The company experienced a 31% decline in sales during the first half of 2024, which improved to a year-on-year decline of 17% in the second half of the year [4]. Business Line Data and Key Metrics Changes - The construction sector faced significant challenges in 2024, impacting cement consumption due to key economic variables and the suspension of many public works projects [5]. Market Data and Key Metrics Changes - The overall industry saw a decline in volumes by 24% to 25% in the previous year, but the company anticipates a two-digit year-on-year increase in volumes for 2025 if the last part of 2024's volumes are maintained [13][15]. Company Strategy and Development Direction - The company is focusing on maintaining pricing dynamics similar to the previous years, with expectations that prices will align with inflation, assuming inflation remains above the devaluation of the peso [9]. Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment in 2024 but expressed optimism for 2025, citing potential private projects that may commence soon [15]. Other Important Information - The Board decided not to pay dividends in 2024 due to the drop in volumes and uncertainty in the market, contrasting with the dividend payments made in 2022 and 2023 [18]. Q&A Session Summary Question: Pricing strategy for 2025 - Management indicated that pricing dynamics in 2025 would likely mirror those of the last couple of years, with a potential deceleration of inflation allowing for more spaced price increments [9]. Question: Volume expectations for 2025 - The company expects a two-digit year-on-year increase in volumes for 2025, contingent on maintaining the volumes from the latter part of 2024 [15]. Question: Dividend expectations for 2025 - The Board did not move forward with dividends in 2024 due to market conditions, and the decision for 2025 is still under analysis [18]. Question: Cost structure and margin opportunities for 2025 - Management noted improvements in energy inputs and indicated that they are assessing their cost structure for potential margin increases [24]. Question: CapEx guidance for 2025 - The company plans to focus on maintenance CapEx for 2025, estimating maintenance costs between $55 million and $60 million [26]. Question: Remaining CapEx for specific projects - The remaining CapEx for the 25-kilogram project is approximately $22 million [31].

Conference Call 4Q24-Results Disclaimer and Forward-Looking Statement Note: Loma Negra's financial information has been prepared in accordance with the Argentine Securities Commission (Comisión Nacional de Valores-CNV) and with International Financial Reporting Standards. Following the categorization of Argentina as a country with a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with IFRS. Consequently, starting July 1, 2018, the Company i ...

Financial Data and Key Metrics Changes - The company reported net production of 141,000 BOE per day and realized oil prices at 99% of Brent, leading to $316 million in adjusted EBITDAX and $118 million in free cash flow for Q4 2024 [19][20] - For the full year 2024, the company achieved over $1 billion in adjusted EBITDAX and generated $355 million in free cash flow, returning about 85% of free cash flow to shareholders through dividends and share repurchases [24][31] - The company ended 2024 with gross production of 163,000 BOE per day and maintained a low annual gross decline of about 6% [23][24] Business Line Data and Key Metrics Changes - The conventional oil and gas business continues to deliver robust cash flow, supported by quality proved reserves and a deep inventory, with significant synergies from low decline, low capital intensity assets [8][19] - The carbon management business is rapidly expanding, with nearly nine million metric tons per annum of carbon management projects under consideration and the first EPA class six permits received for the Elk Hills project [12][10] Market Data and Key Metrics Changes - The company expects to benefit from enhanced revenue streams in natural gas marketing and power, with resource adequacy power capacity payments projected to increase by 50% to $150 million [28] - More than 70% of expected 2025 oil production is hedged at an average price of $67 per barrel, reducing commodity price risk [27] Company Strategy and Development Direction - The company is focused on sustainable efficiencies and plans to invest $285 million to $335 million in 2025, with a targeted controllable cost structure estimated to be nearly 16% lower than the pro forma combined 2023 organization [25][29] - The company aims to lead California's decarbonization efforts, with significant projects in carbon capture and storage (CCS) and partnerships with industrial players like National Cement [16][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong position and ability to deliver significant near-term value drivers, emphasizing the importance of shareholder returns and maintaining a strong balance sheet [34][36] - The management team highlighted the importance of carbon management as a growing sector, with increasing demand for innovative solutions to complex challenges [10][16] Other Important Information - The company has more than $1 billion in liquidity and has rebuilt cash on hand from nearly zero to over $350 million within six months post-merger [30][90] - The company redeemed roughly half of its 2026 senior notes at par, maintaining a leverage ratio of less than one [31][88] Q&A Session Summary Question: Stock price underperformance compared to peers - Management acknowledged the stock's underperformance but highlighted a strong track record of returning capital to shareholders and emphasized the company's intrinsic value [39][42] Question: Details on the buyback program - Management confirmed a buyback program with over $550 million remaining and noted that they have repurchased 18.5 million shares since the program's inception [45][46] Question: Update on data center agreements - Management discussed ongoing talks with multiple parties for data centers, emphasizing the strategic infrastructure advantage and potential for long-term contracts [49][51] Question: Addressing power redundancy in colocated opportunities - Management confirmed that their plant operates 24/7 and has standby agreements to ensure backup power, enhancing reliability [56][58] Question: Clarification on synergies and financial guidance - Management provided details on the targeted synergies from the merger, indicating that they expect to achieve significant cost improvements in 2025 [60][66] Question: Milestones for the National Cement project - Management expressed excitement about the partnership and outlined the importance of CO2 transportation solutions as part of the project [75][78] Question: Financial priorities of the new CFO - The CFO outlined priorities including maintaining a strong balance sheet, driving sustainable cash flow, and disciplined capital allocation [84][86] Question: Update on the Brookfield JV - Management reported that the JV is progressing well, with a focus on capital allocation and project execution [94][96] Question: Future outlook for oil and gas operations - Management indicated confidence in maintaining production levels and achieving a normalized investment cadence as permitting improves [113][130]