CR Cement’s 9M22 profit alert largely expected
<News Alert> CR Cement’s 9M22 profit alert largely expected
- CR Cement announced a profit alert, expecting a 64-66% decline in 9M22 earnings
- This translates to a q-o-q pickup in 3Q earnings, as expected
- Remain cautious on cement price outlook due to high silo level
- We have SELL rating and TP under review
What’s New
- According to HKEx website, CR Cement announced that the company’s profit attributable to the owners for the nine months period is expected to decrease by 64%-66% from a year ago (9M21: HK$5,313m).
- The company has not disclosed other details besides this preliminary assessment.
- Based on that, the indicated earnings for 9M22 would be in a range between HK$3,200m and HK$3,239m, versus 6M22 reported earnings of HK$1,764m. This translates into 3Q22 earnings of HK$1,436m to HK$1,475m, a modest pickup q-o-q, or a 12-%-14% decline y-o-y.
Our View:
- We believe the news is largely anticipated and to be neutral to share price.
- Although we believe downstream construction market sentiment should improve amid the recent supportive measures in property sector, we are cautious on cement market price outlook given the high silo level and resumption of supply from idled capacity.
- We have SELL rating and TP is under review.
