2Q21 performance may be unexciting, but favorable
catalysts are on the horizon
■ A COVID-19 outbreak in Guangdong province, a power outage, and heavy rainfall in 2Q21 were three major factors affecting CR Cement’s profitability.
■ A coal price hike further squeezed profitability in June. However, we may see less pressure from coal price hikes starting in July.
■ A potential decline in coal prices and a demand recovery in the upcoming peak
season in late 3Q21 will be catalysts for CR Cement.
■ We lower our TP to HK$9.32 (1.2x 2021F P/Bv) to reflect our lower earnings forecast. We believe the low P/Bv of 0.97x largely reflects the negatives.