2026 Goal: 260 million tons! Conch Cement Annual Report Analysis

( Source: Cement Network APP )

On March 24, Conch Cement released its 2025 performance report. After review, the highlights are as follows:

I. 2025 Performance and Work Achievements

( I ) Core Performance: Industry Downturn, Profit Growth Against the Trend

1. Revenue 825.32 billion yuan, down 9.33% year-on-year (dragged down by declines in real estate and infrastructure demand).

2. Net profit attributable to parent 81.13 billion yuan, up 5.42% year-on-year; net profit after deducting non-recurring gains and losses 75.88 billion yuan, up 3.03% year-on-year. In the industry’s winter, the profitability resilience stands out.

3. Gross profit margin for self-produced products 27.76%, up 2.95 year-on-year; basic earnings per share 1.54 yuan, up 5.42% year-on-year.

4. Operating cash flow 166.44 billion yuan; cash flow is stable. Asset-liability ratio 20.42%; financial structure is healthy.

( II ) Operational and Development Achievements

1. Extreme cost control: comprehensive clinker cost down 11.12% year-on-year; fuel and power costs down 15.70%. Remarkable results from lean management and bulk procurement.

2. Capacity and layout optimization

Clinker capacity 234 million tons, cement 415 million tons, aggregates 180 million tons, and ready-mixed concrete 70.25 million cubic meters.

· Domestic: completed the acquisition of the Xinjiang Yaobai project, relocation and relocation-construction for Fenyi Conch, and commissioning for new grinding plants at Wuhu/ Tongyang Conch.

· Overseas: the Phnom Penh Conch in Cambodia was put into operation, accelerating globalized layout. For the year, overseas-region revenue from self-produced product sales reached 58.46 billion yuan, up 24.99% year-on-year. The gross margin was as high as 43.31%, up 10.98% year-on-year. Gross profit per ton was about 108 yuan—nearly twice that of domestic operations.

3. Extending the industrial chain: 9 aggregate projects, 22 ready-mixed concrete stations, and 13 dry-mixed mortar/ceramic tile adhesive projects were put into operation, forming a “cement +” integrated model.

4. Breakthroughs in technological innovation

· Nearly 400 authorized patents; Zongyang Conch smart factory was selected as an exemplary level by the Ministry of Industry and Information Technology.

· Released the building materials industry’s first AI large model, covering 40+ production scenarios, reducing costs, improving efficiency, and lowering carbon emissions.

5. Leading in green and low-carbon

· Entirely green-electricity factories, the first green-electricity-to-hydrogen project in the cement industry, and a 500MW energy storage power station were put into operation.

· Wind, solar, and energy storage installed capacity of 1377MW; 29 national-level green factories and 44 national-level green mines.

6. Generous shareholder returns: annual dividends of 0.85 yuan per share (interim 0.24 yuan + final 0.61 yuan). The dividend payout ratio was 55.29%, with a high proportion of cash dividends.

II. Key Highlights of the Annual Report

1. Profit resilience exceeded expectations: with industry demand falling and revenue shrinking, net profit grew against the trend by 5.42%, highlighting the leading cost and operational advantages.

2. Gross margin improved against the trend: self-produced product gross margin +2.95; the decrease in costs far exceeded the decrease in selling prices, improving profitability quality.

3. AI and digitalization benchmark: the industry’s first AI large model was deployed; smart factories were rated as national-level; technology-driven empowerment is leading the industry.

4. Milestone for green transformation: integrated layout of green electricity, green hydrogen, and energy storage; substantial ESG and dual-carbon implementation results.

5. High dividend payout + solid financials: annual dividend payout ratio exceeded 55%, and the asset-liability ratio was only 20.42%. Cash flow was ample, and both shareholder returns and resilience to risk were outstanding.

6. “Cement +” integrated formation: rapid volume growth in aggregates, ready-mixed concrete, and consumer building materials creates a clear second growth curve, offsetting cyclical risks.

7. Overseas business becoming a new growth driver: overseas revenue grew by nearly 25% year-on-year, with a gross margin above 43%, significantly higher than domestic operations. With capacity scale ranking among the leading group of Chinese cement enterprises overseas, it has become the core support for hedging domestic cyclical fluctuations.

III. Key Work Priorities for 2026

1. Operating objectives: sales volume of self-produced cement clinker products of 260 million tons; per-ton cost and per-ton expense to remain stable.

2. Deepening the main business: stabilize existing volumes and expand incremental volumes, optimize product mix; strictly control fuel costs and improve refined operations; advance staggered/peak-offset production and industry “anti-involution,” stabilize prices and profits.

3. Investment and expansion

· Capital expenditure 118.20 billion yuan, focusing on main-business acquisitions, industrial-chain extension, green technological upgrades, and new-quality productive forces.

· Acquire in advantageous domestic regions + develop projects in key overseas markets to improve global layout.

4. Industrial-chain upgrade: expand aggregates and ready-mixed concrete with high-quality capacity; fully cover consumer building materials and build a one-stop building materials service provider.

5. Innovation and green development

· Further deepen the application of the AI large model to digitally empower production and low-carbon initiatives.

· Promote low-carbon cement, operate green-electricity demonstration projects, and plan CCER conversion into carbon-revenue gains.

6. Risk prevention and control: respond to demand fluctuations, industry competition, and pressure from environmental protection policies; strengthen market judgment and compliance management.

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