Financial Performance - 3Q25 net sales reached $4245 million, a 5% increase compared to 3Q24[22] - EBITDA for 3Q25 grew by 19% to $882 million, with a 16% increase on a like-to-like basis[22] - EBITDA margin improved by 250 basis points to 208% in 3Q25[22] - Free Cash Flow (FCF) from operations surged by 190% to $539 million in 3Q25[22] - Year-to-date FCF from operations increased by 56% to $473 million[22] Strategic Initiatives - Project Cutting Edge delivered approximately $90 million in EBITDA savings in 3Q25[18] - The company divested its assets in Panama and acquired a majority stake in an aggregates producer in the southeastern U S[18] - Cemex Europe has already achieved the European Cement Association's 2030 net CO2 emissions target[18] Regional Performance - Mexico's EBITDA grew by 11% year-over-year, with an EBITDA margin of 331%[43] - The U S achieved a record 3Q EBITDA margin of 206%[46] - EMEA experienced a 17% year-over-year increase in EBITDA, with an EBITDA margin of 179%[49] - SCAC's EBITDA increased significantly by 54%, driven by a debottlenecking project in Jamaica, with an EBITDA margin of 216%[52]

Core Viewpoint - China Resources Building Materials Technology Holdings reported a significant decline in revenue and net profit for 3Q25, largely in line with expectations, indicating ongoing challenges in the cement market due to weak demand and rising supply-demand imbalances [1][2]. Group 1: Financial Performance - Revenue fell 11% YoY to Rmb4.86 billion, while attributable net profit dropped 83% YoY to Rmb24.32 million [1]. - The firm's total sales volume of cement and clinker decreased 5.3% YoY to 14.12 million tonnes, which was a milder decline compared to the industry's 6.6% drop [1]. - The per-tonne average selling price (ASP) of cement and clinker decreased Rmb32 YoY to Rmb205, while the per-tonne cost also fell Rmb32 YoY to Rmb173, resulting in a stable per-tonne gross profit of Rmb32 [1]. Group 2: Business Segments - Sales volume for concrete and aggregate businesses increased significantly, with concrete sales rising 11% and aggregate sales up 32% YoY in 3Q25 [2]. - The unit gross profit for the concrete business increased Rmb7 YoY to Rmb46 per cubic meter, while the per-tonne gross profit for aggregates fell Rmb5 YoY to Rmb8.3 [2]. Group 3: Expense and Cost Management - The expense ratio for cement and clinker rose, with expenses per tonne increasing Rmb3 YoY to Rmb50 [3]. - Selling, general and administrative (G&A), and financial expense ratios changed by +0.2 percentage points, +1.9 percentage points, and -0.5 percentage points YoY, respectively [3]. Group 4: Industry Outlook - The cement industry is preparing for potential price hikes in November-December, with expectations that the "anti-involution" campaign may support earnings recovery [3]. - The utilization rate of clinker capacity is projected to rise to about 60% by 2026 if overproduction restrictions are strictly implemented [3]. - Management is focusing on strengthening profit margins and prioritizing pricing strategies, indicating potential upside for profit per tonne in southern China [3]. Group 5: Valuation and Forecast - EPS forecasts for 2025 and 2026 have been cut by 66% and 48% to Rmb0.06 and Rmb0.11, respectively, due to fixed asset impairments and lower-than-expected sales volume and prices [4]. - The stock is currently trading at 28x 2025 estimated P/E and 14x 2026 estimated P/E, with a target price cut by 12% to HK$2.2, implying a 34x 2025 estimated P/E and 17x 2026 estimated P/E with a 24% upside [4].

Summary of Conference Call Notes Industry Overview - **Industry**: Cement Industry in China - **Outlook**: Improved supply-demand dynamics expected to lead to a recovery in cement prices in the near term, supported by better-than-expected anti-involution policies in the long term [1][3] Key Points 1. **Clinker Price Increase**: - Clinker price in the Yangtze River Delta rose by Rmb30/t to Rmb230-240/t FOB due to planned 15-day off-peak production suspension and a bottoming out of prices after previous declines [2] - Cement shipments in the region were affected by adverse weather, operating at 50-60% capacity [2] 2. **Current Market Conditions**: - Cement prices in East China have bottomed, with industry leaders' gross profit per ton (GP/t) near last year's lowest levels, while smaller players are at break-even [3] - Cement inventory utilization is high at 70-80%, which may facilitate better implementation of off-peak production suspensions [3] 3. **Seasonal Improvement Expected**: - Cement shipments are currently low due to weather but are expected to improve seasonally until November [3] - Similar conditions are observed in South and Central China [3] 4. **Long-term Policy Implications**: - The Ministry of Industry and Information Technology (MIIT) is expected to implement stricter anti-involution policies, potentially reducing approved clinker capacity from ~2.2 billion tons (bnt) to ~1.6 bnt by 2026 [4] - This reduction could improve clinker capacity utilization to ~65% in 2026 from ~50% currently, supporting further price improvements [4] 5. **Beneficiaries**: - Key beneficiaries of the expected price recovery include Anhui Conch, CNBM, CR Building Materials, and Huaxin Cement [3] Additional Insights - **Market Monitoring**: The implementation of price hikes needs to be closely monitored due to potential disruptions in cement shipments caused by weather conditions [2] - **Future Capacity Checks**: MIIT's capacity checks and the introduction of Technical Specifications for Clinker Production Monitoring may lead to more stringent operational standards [4] Conclusion - The cement industry in China is poised for a recovery in prices due to improved supply-demand dynamics and supportive government policies. Key players are expected to benefit from these changes, while ongoing monitoring of market conditions is essential for assessing the implementation of price increases and production adjustments.