Asia Cement (China) Holdings Corporation Announces 2025 Annual Results

Date of Release: 9 March 2026
Chairman: HSU Shu-tong

Key Financial Highlights

• Revenue: RMB 5.11 billion, down 13% year-on-year (YoY) from RMB 5.89 billion in 2024.
• Net Profit: RMB 89.13 million, a turnaround from a net loss of RMB 262.57 million in 2024.
• Gross Profit: RMB 699.99 million (up from RMB 592.56 million in 2024); Gross Profit Margin: 14% (2024: 10%).
• Earnings per Share: RMB 0.055 (2024: loss per share RMB -0.168).
• Total Assets: RMB 19.80 billion (2024: RMB 19.68 billion).
• Net Assets: RMB 16.96 billion (2024: RMB 16.88 billion).
• Dividend Proposed: Final dividend of RMB 0.03 per share, totaling approximately RMB 47 million (none in 2024).
• Gearing Ratio: 14% (unchanged YoY).
• Current Ratio: 2.76 (2024: 4.77); Quick Ratio: 2.54 (2024: 4.53).

Business and Industry Overview

Macroeconomic Environment: China’s GDP grew 5.0% in 2025, but investment in fixed assets and property development continued to decline, impacting the cement sector. National cement output fell 6.9% YoY to 1.69 billion tonnes, and industry profits remained low at about RMB 29 billion.

Market Dynamics:

• Cement and clinker demand remained weak, especially in key markets along the Yangtze River and in Sichuan. The company observed a “high-first and subsequent-low” sales pattern during the year, with price recoveries in the first and last quarters offset by declines in the middle of the year.
• Clinker export business was launched in 2025 as part of a strategy to offset domestic weakness.
• Full-year cement sales volume declined YoY, but the company actively expanded into overseas markets.

Detailed Financial Analysis

Revenue Breakdown

• Southeastern region: RMB 2.85 billion (56% of total revenue)
• Central region: RMB 760.62 million (15%)
• Southwestern region: RMB 1.49 billion (29%)
• Product Mix: Cement 85%, Clinker 4%, Ready-mixed concrete (RMC) 2%, Others 9%

The decline in revenue was attributed to both lower sales volumes and average selling prices.

Cost and Profitability

• Cost of sales: RMB 4.41 billion, down 17% YoY, primarily due to lower coal costs.
• Administrative expenses: RMB 286.76 million, down 5% YoY due to lower depreciation, staff costs, and legal fees.
• Distribution and selling expenses: RMB 367.50 million, up 5% YoY mainly due to higher transportation costs for cement and clinker.
• Finance costs: RMB 36.72 million, down 33% YoY due to lower average borrowing interest rates.
• Other expenses/gains: Net loss of RMB 60.29 million (up 111%), mainly due to a decrease in fair value gains on financial assets and increased charitable donations.

Taxation

• Income tax expense: RMB 94.87 million, down 70% from RMB 317 million in 2024.
• Some subsidiaries in Sichuan benefited from a preferential enterprise income tax rate of 15% (policy in force through 2030).

Liquidity and Cash Flow

• Cash generated from operations decreased to RMB 201.84 million (2024: RMB 459.74 million).
• Net cash used in investing activities: RMB 802.61 million (2024: RMB 4.12 billion), mainly for investments in bank deposits and plant/equipment.
• Capital expenditure: RMB 702.78 million (2024: RMB 481.40 million).
• Unutilized credit facilities: RMB 6.71 billion.
• Short-term borrowings: RMB 1.45 billion, all unsecured, with interest rates between 1.99%-2.15%.
• No assets pledged or contingent liabilities.

Dividend and Shareholder Returns

The Board has recommended a final dividend of RMB 0.03 per share, subject to shareholder approval at the forthcoming AGM. This reflects a return to dividend payout after no dividend was declared for 2024, signaling improved profitability and financial position.

Corporate Governance and Board Changes

• No share options outstanding or granted (the scheme expired in 2018).
• Changes to board and committee composition, notably the appointment of Ms. HO LIN, Mei-hsueh as an independent non-executive director and committee member on 28 October 2025.
• No changes to directors’ information under Listing Rule 13.51B(1).
• No purchases, sales, or redemptions of listed securities by the Company or its subsidiaries in 2025.
• The Company confirms ongoing compliance with Hong Kong Listing Rules and maintains sufficient public float.

2026 Business Outlook and Potential Price-Sensitive Developments

Industry Challenges

• Continued Weak Demand: Although the pace of decline is expected to slow, cement demand is forecast to remain subdued in 2026, especially due to reduced real estate activity.
• Industry Competition: The environment is characterized by overcapacity and fragile cooperation between leading enterprises, making price recovery difficult unless a new equilibrium is reached.
• Carbon Market Regulation: Tighter emission caps and an increase in paid carbon quotas will raise compliance costs, compelling cement companies to accelerate low-carbon transition. This could increase capital expenditure and operational costs for the Group, potentially impacting margins if not managed effectively.

Positive Industry Trends

• Ongoing industry consolidation, with leading enterprises phasing out inefficient capacity and small-to-medium players exiting the market, is expected to optimize supply and reduce overcapacity.

Group Strategy & Outlook

• Sales Volume: Expected to slightly decrease YoY in 2026, reflecting industry headwinds.
• Operational Focus: The Group will prioritize efficiency, cost control, high-quality service, and environmental protection. It will leverage integrated storage and transportation and enhance customer service to defend and expand market share in core regions.
• Overseas Expansion: The Group will continue to pursue export channels and overseas opportunities to mitigate domestic market risks.
• Dividend Policy: The resumption of dividend payout signals confidence in future cash flows and profitability, which may positively influence share price.

Other Noteworthy Points for Shareholders

• Record and Payment Dates for Dividend: Register of members will be closed from 20 May 2026 to 26 May 2026 for AGM attendance, and from 9 June 2026 to 12 June 2026 for dividend entitlement. The final dividend is scheduled for payment on 10 July 2026.
• Post-Reporting Period Events: No significant events after the reporting period up to the date of the report.
• Foreign Exchange Risk: The majority of sales and purchases are denominated in RMB. Future RMB volatility could impact results, but management monitors this risk and may consider hedging if needed.
• Human Resources: As of year-end, the Group employed 2,727 staff. No share-based compensation is currently active.

Potential Share Price Sensitive Issues

• Return to Profitability after a loss in 2024 is a positive turnaround.
• Resumption of Dividend Payments is a positive signal to the market.
• Ongoing Industry Consolidation and capacity reductions may support future pricing and margins if supply-demand dynamics improve.
• Regulatory Risks from tightening carbon emission policies could affect future costs and capital expenditures.
• Volatility in Market Prices and continued weak demand are risks that might cap upside in the near term.
• High Liquidity and Strong Balance Sheet position the Group to weather industry headwinds and pursue growth or consolidation opportunities.
• Overseas Expansion may provide new growth drivers if domestic demand remains weak.

Disclaimer: This article is provided for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult with a licensed financial advisor before making investment decisions. The information above is based on the Asia Cement (China) Holdings Corporation 2025 Annual Results announcement and related management discussion and analysis, and may be subject to change or clarification in future disclosures by the Company.

View ASIA CEMENT CH Historical chart here