CNBM warns of RMB890M interim loss as cement prices slump

CNBM (03323.HK) expects an interim net loss of about RMB890 million for the six months ended June 30, swinging from a RMB1.36 billion profit a year earlier.

The swing to loss was mainly driven by decreased sales prices of cement, commercial concrete and aggregate — the group's major products — as well as increased impairment losses on property, plant and equipment and goodwill, the company said in a filing. Lower sales volume of commercial concrete and gypsum board and a higher net loss from fair value changes of financial assets also contributed, it said.

Partially offsetting the decline were higher sales prices and lower costs for glass fibers, increased electronic fabric prices, higher sales volume of electronic fabrics and lithium battery separator, and lower cost of sales for cement and commercial concrete, CNBM said. The glass fiber and electronic materials segments have benefited from demand in renewable energy and electronics manufacturing, providing a rare bright spot for the diversified builder.

The company did not disclose revenue or earnings per share in the profit warning. Full interim results are expected by the end of August, according to the filing.

The stock opened 7.91% lower and hit a trough of HKD3.83 before last trading at HKD3.85, down 10.47%, with turnover of HKD134 million. Short selling accounted for 33.4% of the day's volume, or HKD106 million, suggesting bearish positioning by institutional investors. The company did not declare an interim dividend, consistent with the prior year, after paying a final dividend of RMB0.15 per share, or about HKD0.1712, for fiscal 2025 in March.

The loss marks a sharp reversal for CNBM, which reported a profit of RMB1.36 billion in the first half of 2025. The company's main products — cement, commercial concrete and aggregate — have all faced pricing pressure as China's property market downturn and slowing infrastructure spending curbed demand.

CNBM, the country's largest cement producer by capacity, operates through a network of subsidiaries across China. The state-backed conglomerate also produces glass fibers, gypsum board, and lithium battery separators, segments that provided partial offsets to the construction-related weakness.

The earnings swing highlights the severe downturn in China's construction and real estate sectors. The broader weakness in the Chinese property market and industrial demand has weighed on building materials companies across the sector.

Investors will watch for any signs of stabilization in cement prices and property starts in the second half of 2026. CNBM's profit warning may also raise concerns about future dividend payments, given the company skipped its interim payout for the second consecutive year.

This article is for informational purposes only and does not constitute investment advice.