Conch Cement's net profit increased by 5.42%, core product gross profit margin rebounded, and outstanding bonds amount to 10 billion | Bond Market Financial Report Observation

Caixin March 25 News (Editor Zhang Liang, Intern Huang Jiahui) Anhui Conch Cement Co., Ltd. (referred to as “Conch Cement,” 600585.SH/00914.HK) recently announced its latest annual report, projecting a net profit attributable to the parent company of 5.42% in 2025. Benefiting from declines in energy prices such as coal and optimized cost control, the gross profit margins of the company’s core cement clinker products generally rebounded, though the gross profit margin of aggregate business slightly declined.

According to the annual report disclosed on the evening of March 24, Conch Cement achieved operating revenue of 82.53B yuan in 2025, down 9.33% year-on-year; net profit attributable to the parent company was 8.11B yuan, up 5.42% year-on-year.

Conch Cement’s main businesses include the production and sales of cement, commodity clinker, aggregates, and concrete. In 2025, national cement output decreased by 6.9% year-on-year, with industry demand continuing to shrink. Facing market challenges, the company strengthened cost management, with the comprehensive cost of cement clinker self-produced products decreasing by 11.12% year-on-year, including a 15.70% reduction in fuel and power costs.

In its 2025 annual report, the company stated that the cement market in 2025 showed a volatile downward trend, with the industry continuing to advance structural adjustments, capacity reduction, and supply-side reforms simultaneously. The company’s main business revenue in 2025 decreased by 6.39% compared to the previous year, but benefiting from improved operational efficiency and cost reductions, net profit attributable to the parent increased compared to the previous year.

In 2025, Conch Cement’s overall gross profit margin was 27.38%, up 2.87 percentage points from the previous year. The gross profit margins of the company’s core products generally rebounded in 2025, with 42.5-grade cement, 32.5-grade cement, and clinker gross profit margins increasing by 2.88, 6.28, and 11.39 percentage points respectively. The comprehensive gross profit margin of aggregates and mechanized sand was 40.13%, down 6.78 percentage points year-on-year; the comprehensive gross profit margin of commercial concrete was 12.38%, up 2.38 percentage points year-on-year.

In 2024, Conch Cement’s debt-to-asset ratio was 21.31%, but in 2025, benefiting from reductions in loan and other liability balances, the ratio decreased by 0.89 percentage points to 20.42%. The company stated in the annual report that in 2025, its EBITDA to total debt ratio was 0.37; the interest coverage ratio was 14.68, indicating improved debt repayment capacity and overall strong debt servicing ability.

Notably, in 2025, the company’s overseas business performed remarkably well, with overseas regional building materials sales revenue reaching 5.85B yuan, a year-on-year increase of 24.99%, and gross profit margin reaching 43.31%, up 10.98 percentage points year-on-year. During the reporting period, overseas projects developed steadily, with the Cambodia Phnom Penh Conch plant successfully completed and operational.

Meanwhile, the company launched the industry’s first AI large model for building materials, which has been applied in over 40 scenarios including quality control and production optimization. The Zongyang Conch Intelligent Factory was selected as a 2025 outstanding smart factory project by the Ministry of Industry and Information Technology.

Currently, Conch Cement has four outstanding bonds with a total balance of 10 billion yuan, all issued in 2024, with coupon rates ranging from 2.10% to 2.20%.

Figure: Conch Cement Outstanding Bonds

(Source: Enterprise Early Warning System, Caixin整理)

China Chengxin International Research Report pointed out that looking ahead to 2026, capacity clearing and increased industry concentration are expected to support cement price recovery, but the collaborative effects among large enterprises remain to be seen. It is expected that leading companies will see slight profit improvements, while mid- and small-sized companies will continue to face pressure. Overall, the industry’s debt levels are controllable, and capital structures are stable, but liquidity risks for loss-making enterprises should be watched carefully.