BNBMPLC(SZ:000786)2025-10-28 03:06Summary of Beijing New Building Materials (000786.SZ) Earnings Call Company Overview - Company: Beijing New Building Materials (BNBM) - Ticker: 000786.SZ - Market Cap: Rmb40.0 billion / $5.6 billion - Industry: China Advanced Materials & Construction Key Financial Performance - 3Q25 Net Profit: Rmb657 million, down 29% year-over-year (yoy) and 20% below expectations [1][19] - Topline Revenue: Rmb6.35 billion, down 6% yoy, slightly below expectations, with strong waterproofing and coating sales offsetting weak gypsum board sales [11][19] - Gross Profit Margin (GPM): 27.8%, down 2.3 percentage points yoy, primarily due to lower GPM from gypsum board [19] - EBIT Margin: 10.5%, down 4.2 percentage points yoy, leading to EBIT of Rmb667 million, down 33% yoy [19] - Net Profit Margin (NPM): 10.4%, down 3.4 percentage points yoy [19] Sales and Product Performance - Gypsum Board Sales: Experienced a high single-digit percentage decline in both volume and average selling price (ASP) due to soft industry demand and increased competition [11][19] - Waterproofing and Coating Sales: Showed solid growth, with coating sales growing over 10% yoy [11][19] - Management Outlook: Optimistic about restoring gypsum board ASP through improved product mix and market position, with plans to invest in domestic gypsum board capacity [17][22] Earnings Revisions and Valuation - Target Price: Reduced to Rmb32.0 from Rmb33.0, reflecting earnings revisions with EPS down 5-6% for 2025E-2027E [2][21] - Valuation Metrics: Trading at 11x 2026E P/E, with a projected P/E of 12.2x for 2025E [2][12] Investment Thesis - Core Business: BNBM is the world's largest producer of gypsum boards, benefiting from rising renovation demand amid a slowdown in property completions in China [22] - New Product Expansion: Includes metal framing, waterproofing, and coatings, which are expected to drive earnings growth [22] - Key Risks: Weaker-than-expected property completions, raw material price increases, and execution risks on acquisitions [24] Financial Outlook - Revenue Forecasts: Expected revenues of Rmb25.3 billion in 2025E, Rmb26.4 billion in 2026E, and Rmb27.4 billion in 2027E [21] - EPS Forecasts: Projected EPS of Rmb1.93 in 2025E, Rmb2.07 in 2026E, and Rmb2.24 in 2027E [21] Additional Insights - Cash Flow: Recorded net operating cash inflow of Rmb577 million in 3Q25, down from Rmb1.18 billion in 2Q25 [19] - Capex: Increased by 29% yoy to Rmb322 million, likely due to overseas capacity expansion [19] - Net Cash Position: Maintained a net cash position of Rmb1.36 billion [19] This summary encapsulates the key points from the earnings call, highlighting the company's performance, outlook, and investment considerations.