On August 26, Conch Cement disclosed the semi-annual report for 2026: the net profit attributable to the parent company was 2.527 billion yuan, down 42.76% year-on-year, a new low in the same period in the past 15 years. This figure is 13.4% lower than that in 2012. The industry leader, who earned more than 16 billion yuan in
one and a half years, now has to face a new low in net profit. Statistics from
China Cement Network show that the performance of Conch Cement in the first half of the year has basically shown a downward trend year by year after reaching a record high of 16.07 billion yuan in 2020. From 2020 to 2026, there is only a slight rebound in 2025, which is basically in line with the overall situation of the cement industry. In the second half of
2024, the cement industry set off a wave of "anti-involution", and the price of cement continued to rise, laying a good price foundation for 2025. China Cement Network data show that the second half of 2024 is the highest price of cement in the last four years, and the price of cement in early 2025 is also the highest since 2023. The high point of cement price at the beginning of 2025 is 70 yuan/ton and 90 yuan/ton higher than that at the beginning of 2024 and 2026 respectively. In the
first half of the year, the profitability of the cement industry generally improved, but then with the continuous decline in demand and fierce market competition, the cement industry in the first half of 2026 ushered in the second industry-wide loss in the new century since the first half of 2024. The root cause of the decline in
profits is hidden in the gross profit per ton.
In the first half of the year, the gross profit per ton of conch cement clinker products was 45.72 yuan/ton, which shrank by 34.5% compared with 69.77 yuan/ton in the same period last year; The gross profit per ton of clinker production capacity was only 23.64 yuan/ton, down 25.8% from the same period last year-both indicators hit a new low in the same period since 2012, and the gross profit per ton was only two-thirds of the same period in 2012 (68.26 yuan/ton). The failure of the
price side is the main reason.
In the first half of the year, the selling price of Conch Cement's self-operated cement clinker products was RMB208.26 per ton, representing a decrease of RMB35.06 per ton or 14.41% as compared with the same period of last year. The Company continued to promote cost reduction and efficiency enhancement, and the production cost per ton of cement products decreased by RMB11 per ton to RMB162.54 per ton, representing a decrease of 6.34%. However, the decrease in the cost per ton was far less than decrease in the price per ton, which was difficult to offset the adverse effects of the decrease in the price, and the gross profit per ton of cement clinker decreased significantly. In the first half of
2020, the gross profit per ton of Conch's clinker production capacity reached the best level of 62.04 yuan/ton in the same period. After 2022, the cement industry as a whole entered a downward period, while Conch was still increasing clinker production capacity at that time, and this momentum continued until 2025. Although Conch actively optimized its asset distribution in the first half of 2026, clinker production capacity began to decline, reaching 234 million tons, a decline of 5.41%, but this decline was less than decline in gross profit of cement business (37.08%), and the gross profit per ton of clinker production capacity also reached a 15-year low.
From the perspective of the overall trend of the industry, cement consumption will continue to decline, and the demand for cement is expected to drop to 1.0-1.2 billion tons by 2030. The progress of resolving overcapacity by market-oriented way is relatively slow, the contradiction between supply and demand is difficult to effectively solve in the short term, the market competition is becoming increasingly fierce, and the industry profit will be a slow repair process. From the enterprise level, Conch Cement insists on making the main cement industry stronger and bigger, and its domestic share has steadily increased, which is currently around 15%.
In recent years, Conch has made great efforts to cope with the downturn of the domestic market and accelerate the pace of "going out". In the first half of this year, the overseas market realized a simultaneous rise in volume and price, but the profit level was meager, less than 0.7 billion yuan (large exchange losses), and the contribution level was limited.
In the future, we will wait and see whether Conch Cement can accelerate the pace of domestic mergers and acquisitions to optimize the domestic market competition pattern, increase overseas market development efforts to broaden profit sources, which will be the core variables affecting its profitability!
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