On August 25, Shanshui Cement (HK0691) (00691. HK) disclosed its interim results for 2026. For the six months ended June 30, 2026, the company realized operating income of 4.074 billion yuan, down 26.6% from the same period last year; Net profit attributable to shareholders of listed companies was a loss of 726 million yuan, compared with a profit of 250 million yuan in the same period last year. As of the end of the reporting period, the total assets of the company were 28.328 billion yuan, the total liabilities were 28.328 billion yuan, and the basic earnings per share loss was 0.17 yuan. From the perspective of the
core business sector, due to the deep decline in industry demand and the continued decline in prices, the sales volume and price of Shanshui Cement (HK0691) cement (884060) and clinker are both under pressure, which has become the main factor dragging down the company's performance. During the reporting period, the sales volume of cement (884060) of the Company was 15.957 million tons, representing a year-on-year decrease of 9.7%, and the sales volume of clinker was 17.674 million tons (including the difference in internal consumption and other statistical standards, the external sales decreased significantly), representing a year-on-year decrease. In particular, the average selling price of cement (884060) was RMB215.6 per tonne, representing a decrease of RMB49.8 or 18.8% as compared with the corresponding period of last year; the average selling price of clinker was RMB200.5 per tonne, representing a decrease of RMB31.5 or 13.6% as compared with the corresponding period of last year. Although concrete sales increased by 47.1% year-on-year to 1.021 million cubic meters, due to the overall market downturn, it failed to offset the revenue gap caused by the decline in the volume and price of main products, resulting in a decline in the comprehensive gross profit rate from 14.3% in the same period last year to 11.5%.
The management pointed out that in the first half of 2026, the cement (884060) industry showed a trend of "deep drop in demand, out of control of supply and bottoming out of price", and the national fixed asset investment and the new construction area of real estate (881153) fell sharply, which led to the unilateral downward trend of cement (884060) market demand. On the cost side, although the unit purchase price of coal (850105) increased by about 11.9% year-on-year, the unit coal consumption decreased through technology consumption reduction and disposal of idle equipment, but the structural changes in raw materials and electricity costs still pushed up the overall cost of sales to 88.5% of revenue. In addition, administrative expenses increased significantly by 36.5% year-on-year due to the increase in one-time dismissal benefits arising from personnel optimization, which further exacerbated the operating losses. In terms of
financial resources and cash flow, as of June 30, 2026, the total amount of corporate bank (FITB) borrowing was 5.451 billion yuan, an increase of 140 million yuan compared with the beginning of the year, of which short-term borrowing accounted for 89.5%. Net cash flow generated from operating activities for the period was RMB469 million, representing a year-on-year decrease of RMB628 million, which was mainly due to the decline in revenue and the payment of large amounts of dismissal benefits. Net current liabilities were 2.596 billion yuan, but the board said it would launch a new bank (FITB) borrowing line as needed and believed that the group could meet its financial obligations as they fell due. In terms of capital expenditure, during the reporting period, 154 million yuan was invested in the reserve of carbon mountain resources and technological transformation of production lines, and 1.549 billion yuan of capital commitments were entered into but not allocated.
Looking forward to the second half of the year, the management believes that with the implementation of the steady growth policy and the start of the "15th Five-Year Plan", the financial investment is expected to increase, and the demand for cement (884060) or marginal improvement. Faced with the large-scale loss situation of the whole industry, it is expected that some regions will strengthen the implementation of peak staggering production, balance supply and demand by reducing capacity utilization rate, and promote price increases in stages. The company plans to continue to deepen cost reduction and efficiency enhancement, implement "slimming and fitness", shut down and eliminate inefficient production capacity with no hope of turning around losses, and accelerate digital transformation and green low-carbon development, in order to stabilize market share and improve profitability.
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