Asia Cement Corporation (1102 TT, NT$34.35) - Yield support despite conservative cement demand outlook

Research evidence excerpt

Asia Cement Corporation (1102 TT, NT$34.35) - Yield support despite conservative cement demand outlook

ing from breakeven in the same period

last year. Cement shipment was 4mn tons, -5% YoY, with the decline widening. The

Source: CMoney

average price was RMB198/ton, -15% YoY. Gross profit per ton fell from RMB25/ton in

What's changed 1Q25 to RMB10/ton, mainly due to higher coal costs and lower cement prices. Recently,

New Old %

demand in China’s cement industry has not shown a clear recovery, and cement prices

Rating Buy Buy

have declined entering the off-season. In March, as the market resumed after theTarget price 40 40 0

EPS forecast 2.77 3.14 -12 holidays, demand recovered compared to the previous quarter but was constrained by

Target PE 14.4 12.7 tight funding and insufficient new project starts, coupled with the weather impact,

resulting in weak demand recovery. Looking ahead to 2Q26, as demand has not recovered,

Financial summary Year-end: Dec 31

NT$mn FY25 FY26F FY27F a further 3-5% decline is expected, with ACC China’s gross profit per ton estimated to

Net sales 71,039 67,306 68,350 remain at a low level of RMB10/ton. For the full year, China’s 15th Five-Year Plan will enter

YoY growth (%) -6.9 -5.3 1.6 economic structural reform, with real estate policies focusing on inventory reduction. New

Op profit 8,406 6,971 7,242

policies will strictly control capacity, eliminate low-efficiency production lines, andYoY growth (%) 5.6 -17.1 3.9

Net profit 10,030 9,830 10,272 gradually implement carbon emission management, helping supply and demand to move

YoY growth (%) -22.2 -2.0 4.5 toward balance. Full-year cement demand is expected to decline by a mid-single digit

EPS (NT$) 3.00 2.77 2.90

percentage, with the rate of decline narrowing.