China Shanshui Cement Group Limited 2025 Annual Report: Key Investor Takeaways

Executive Summary

China Shanshui Cement Group Limited’s 2025 Annual Report presents a challenging year for the Group, marked by significant financial losses, continued operational headwinds, and persistent uncertainties regarding its future as a going concern. The report contains several issues that may be price-sensitive and could affect share value, including substantial losses, net current liabilities, large amounts of short-term debt, ongoing litigation, and the absence of dividend payments. Investors are urged to review these details carefully.

Key Financial Highlights

• Revenue: RMB 11.56 billion for 2025, down sharply from RMB 14.51 billion in 2024 and RMB 18.12 billion in 2023. This marks a continuous decline in sales.
• Gross Profit: RMB 1.62 billion, with gross margin at 14.0%, slightly down from 14.4% in 2024 and significantly lower than 29.4% in 2021.
• Operating Loss: The Group posted an operating loss of RMB 517.5 million, compared to a small profit of RMB 182.4 million in 2024.
• Net Loss: The net loss for the year was RMB 1.09 billion, further deteriorating from RMB 189 million in 2024 and RMB 1.05 billion in 2023.
• Loss per Share: Basic and diluted loss per share stood at RMB (0.23), compared to RMB (0.03) in 2024.
• Net Current Liabilities: RMB 2.03 billion as at 31 December 2025. This signals potential liquidity concerns.
• Interest-Bearing Bank Loans: RMB 5.31 billion in total, with RMB 4.51 billion due within twelve months.
• No Dividend: The Board does not recommend any dividend for 2025.

Material Uncertainties and Risks

• Going Concern Doubts: The auditors’ report highlights material uncertainty about the Group’s ability to continue as a going concern, given sustained losses, net current liabilities, and substantial debt maturing in the short term.
• Winding-Up Petition: There is an unresolved winding-up petition against the Company in the Cayman Islands, which restricts disposition of assets (including dividends) unless validated by court order. This legal uncertainty may materially affect shareholder interests.
• Liquidity Pressures: Management is taking steps to mitigate liquidity pressures, including negotiating loan renewals, cost-cutting measures, and legal defense against outstanding litigations. However, if these measures fail, significant asset write-downs and reclassification of liabilities may be required.
• Impairment Risks: The Group is facing impairment concerns on property, plant, equipment, right-of-use assets, intangible assets, and goodwill, requiring significant management judgement and assumptions about future cash flows.
• Connected Transactions: The auditors and independent directors confirm that continuing connected transactions have been conducted in the ordinary course of business, on fair terms, and within approved caps.
• Share Capital: No new shares were issued during the reporting period. Total issued shares as of 31 December 2025 stand at 4,353,966,228.
• Major Shareholders: Tianrui Group Company Limited and related parties hold 21.85% of shares. Asia Cement Corporation, CNBM (China National Building Materials), and others also have significant stakes.
• Share Option Scheme: All outstanding share options lapsed in January 2025. There are no outstanding options as of the date of the report.

Business Outlook for 2026

1. Turning Losses into Profits: The Company’s core objective for 2026 is to reverse losses and achieve profitability, focusing on reform, cost control, and risk prevention.
2. Quality Improvement: Efforts will be made to optimize marketing, expand high-value products, and strengthen brand influence.
3. Cost Control: Management will intensify procurement synergy, lean production, and expense management to reduce costs and improve efficiency.
4. Internal Governance: Plans to deepen internal reforms, optimize structures, enhance talent management, and stimulate organizational vitality.
5. Transformation & Innovation: The Group will promote green, low-carbon development, digital upgrades, and improved resource utilization.
6. Risk Management: Strengthening risk prevention, fund management, and compliance to guard against operational risks.

Corporate Governance & Shareholder Rights

• No Competing Business: Directors do not have interests in competing businesses.
• Remuneration: Competitive remuneration and benefits are offered to employees. No director or executive exercised share acquisition rights in 2025.
• Shareholder Communication: The Company maintains multiple communication channels and encourages shareholder engagement at general meetings. All resolutions are voted by poll.
• Dividend Policy: The Board considers various factors before proposing dividends. No dividends were recommended for 2025.

Other Noteworthy Points

• Donations: RMB 3.32 million contributed to charitable and other donations in 2025.
• Audit: Moore CPA Limited remains the auditor; their remuneration is detailed in the notes.
• Risk Management: The Company maintains anti-corruption and whistleblowing policies, with regular internal audits and review of risk management systems.
• Environmental, Social and Governance Report: Published alongside the annual report, consistent with Hong Kong Stock Exchange requirements.

Potential Price-Sensitive Information

The combination of persistent losses, net current liabilities, substantial short-term debt, unresolved winding-up petition, and doubts about going concern status are highly price-sensitive and could negatively impact share value. The absence of dividends and impairment risks further add to the negative outlook for shareholders. Investors should monitor any developments regarding loan renewals, litigation outcomes, and the Company’s liquidity and solvency.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. The information presented may be subject to change and is based on the Company’s 2025 Annual Report.

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