The Zhitong Finance App learned that Bank of America Securities released a research report saying that Conch Cement (00914)'s net profit for the third quarter was RMB 216 million, down 89% year on year or 80% from quarter to quarter, lower than the bank's original forecast of about 500 million yuan; the bank reaffirmed the “buy” rating and lowered the target price of H shares by 5% to HK$19 from HK$20.

The bank pointed out that the company's self-produced cement sales fell 6.7% year on year to 64.4 million tons, with a gross profit of only 32 yuan per ton, dragged down by rising unit costs driven by falling average selling prices and rising coal prices. Considering the weak profit margin of cement, the profit forecast for 2026 to 2028 was lowered by 58%, 40% and 27%, respectively, and the gross profit per ton is expected to gradually rise to 47 to 54 yuan from 2027 to 2028. Hailuo Cement recently announced a minimum dividend policy of RMB 0.9 per share. In addition to continuing to repurchase H shares, it can provide a 6.4% dividend rate, which strongly supports the stock price.

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