Huaxin Cement announced its preliminary results for the first half of 2025, forecasting net profit attributable to the parent company between 10.96 billion yuan and 11.32 billion yuan. This marks a robust year-over-year increase of 3.65 billion yuan to 4.02 billion yuan, translating to growth of 50% to 55%. For the second quarter alone, net profit is expected to range from 8.62 billion yuan to 8.98 billion yuan, surging 55.84% to 62.44% compared to the same period last year.

Domestically, cement demand remained under pressure from January to May 2025, with national output falling 4% year-over-year to 659 million tons. Key regions for Huaxin Cement—Hubei, Yunnan, and Hunan—saw mixed results, with Hubei posting a 4.48% increase while Yunnan and Hunan declined by 7.53% and 6.08%, respectively. Despite sluggish demand since April and supply-side disruptions from suboptimal production halts, cement prices in Huaxin's core markets held firm year-over-year. Concurrently, thermal coal prices plunged 22.73% year-over-year in Q2 to an average of 550.31 yuan per ton, also down 12.30% quarter-over-quarter. This combination of resilient pricing and falling input costs likely bolstered profitability for Huaxin's cement and clinker segments.

Overseas, Huaxin Cement is poised for gains. A recent technical upgrade at its Simuma plant in South Africa slashed renovation time to just nine months, boosting clinker daily output from 1,500 tons to 4,000 tons. The project added a 9-megawatt waste-heat power system and a new 1-million-ton annual cement grinding station. Earlier expansions, including a 10.6-million-ton cement capacity deal in Nigeria and an 8.8-million-ton aggregate project in Brazil, plus a new 3,000-ton daily clinker line in Mozambique, are set to drive volume growth in 2025. Higher overseas sales volumes, coupled with lower coal costs and post-upgrade efficiencies, should enhance international profitability.

Industry-wide, the China Cement Association's new "anti-internal volume" initiative aims to stabilize markets. Announced on July 1, the policy mandates alignment between registered and actual production capacities, requiring firms with excess output to comply via filings, environmental assessments, and energy reviews. Short-term supply cuts from corporate adjustments could prop up cement prices, while long-term efforts to curb overcapacity and price wars may improve sector-wide margins. Ongoing supply-side reforms—like capacity controls, carbon trading integration, and stricter emissions standards—further support a gradual recovery in prices and profits.

For investors, Huaxin Cement's global push and high-margin aggregate business underpin its outlook. Projected revenues for 2025-2027 stand at 363.52 billion yuan, 396.97 billion yuan, and 430.37 billion yuan, reflecting growth rates of 6.24%, 9.20%, and 8.41%. Net profit is forecast at 24.25 billion yuan, 26.96 billion yuan, and 30.47 billion yuan for those years, with year-over-year increases of 0.36%, 11.18%, and 13.03%. Based on 2024-2026 price-to-earnings ratios of 11.2x, 10.0x, and 8.9x, a 13x multiple for 2025 implies a six-month target price of 15.2 yuan.

Risks include economic volatility, policy implementation delays, tepid demand recovery, slower overseas expansion, inconsistent production controls, heightened competition, and rising input costs.