Asia Cement Scores Record Net Profit of RMB664 M. From China Operations in 1st Half of This Year

Byyyp

Updated Mon, 05 Sep 2011 00:00:00 GMT

Benefiting from cement price hikes, Asia Cement Corp., publicly listed on Taiwan's bourse, recorded a new high of RMB664 million in net profits from its operations in China in the first half of this year, for a whopping growth of 369% from a year ago.

The company is confident of earning more in the second half of the year through next year, mainly because demand for cement will further grow in China due to the 12th Five-year Development Plan, which has been put into practice to improve agricultural infrastructure and transportation in rural and urban regions nationwide.

Besides, the company added, Chinese cement makers' supply reduction resulting from the Chinese government’s intention to upgrade traditional manufacturing industries to reduce energy consumption and carbon emission in China will benefit Taiwanese cement suppliers in the near future.

In the meantime, Asia Cement is also optimistic about market prospects in Taiwan, as the local construction industry has been picking up amid continued implementation of infrastructure construction projects and increased private buildings. The company has projected cement consumption on the island will increase about 10% in the second half of this year compared to the first half.

Noteworthy is that the Taiwan Cement Manufacturers' Association has launched an anti-dumping suit against Chinese companies, with local competent authorities to rule on the case at the end of September. This will help to stabilize cement prices in the market to benefit Taiwanese companies.

Considering the favorable market factors mentioned above, institutional investors opine that Asia Cement's cement sales in both Taiwan and China will still have room for growth in the second half of the year, therefore projecting the company's full-year profits to exceed NT$10 billion in the year.