BofA Securities: Cuts Anhui Conch Cement (00914) Target Price to HK$19; Third-Quarter Profit Below Expectations, Minimum Dividend Policy Provides Support

BofA Securities issued a research report stating that Anhui Conch Cement (00914)'s third-quarter net profit was RMB216 million, down 89% year-on-year or 80% quarter-on-quarter, below the bank's original expectation of approximately RMB500 million; the bank reiterated its "Buy" rating and lowered its H-share target price by 5% from HK$20 to HK$19. The bank noted that the company's self-produced cement sales volume fell 6.7% year-on-year to 64.4 million tonnes, with gross profit per tonne of only RMB32, dragged down by falling average selling prices and rising unit costs driven by higher coal prices. Considering the weak cement profit margin, it lowered its earnings forecasts for 2026 to 2028 by 58%, 40% and 27% respectively, and expects gross profit per tonne to gradually recover to RMB47 to RMB54 in 2027 to 2028. Anhui Conch Cement recently announced a minimum dividend policy of RMB0.9 per share, coupled with continued H-share buybacks, which can provide a 6.4% dividend yield and offer strong support for the share price.