Exchange: HKSE | Sector: Basic Materials | Industry: Construction Materials
Q1 2025
Published: Mar 31, 2025
Earnings Highlights
Revenue of $36.64B down 36% year-over-year
EPS of $-0.07 decreased by 161.9% from previous year
Gross margin of 18.9%
Net income of -516.85M
"N/A" - N/A
CNBM (3323.HK) QQ1 2025 Results — Revenue Decline, Margin Pressure and Net Loss Signals a Challenging Near-Term Outlook
Executive Summary
CNBM’s QQ1 2025 results reflect a material YoY revenue decline and a turn to a net loss, underscoring ongoing sector headwinds in construction materials and capital-intensive asset deployment. Revenue fell 35.96% YoY to 36.64 billion CNY and QoQ by 21.13%, while gross profit contracted to 6.93 billion CNY for a gross margin of 18.9%. Despite a solid EBITDA of 4.94 billion CNY, operating income remained modest at 475 million CNY (1.3% margin) and net income posted a loss of 516.9 million CNY, translating to -0.14% net margin and -0.068 in basic EPS. The earnings quality suggests heavy fixed-cost absorption and continued depreciation of a large asset base in a challenging demand environment. Management commentary is not included in the dataset, so the analysis relies on reported P&L and balance sheet dynamics as the basis for the near-term outlook.
Balance sheet and liquidity indicators point to a leveraged, capital-intensive business with constrained near-term cash generation. Current ratio stood at 0.83 and quick ratio at 0.72, while cash ratio was only 0.15, highlighting limited near-term liquidity against short-term obligations. Debt metrics remain elevated (debt ratio 0.31; long-term debt to capitalization 0.50; total debt to capitalization 0.58), and per-share cash flow measures are negative (operating cash flow per share -0.67; free cash flow per share -1.05), signaling that sustaining dividend expectations or dividend-related allocations could be challenging absent an improvement in earnings or cash conversion.
Looking forward, the lack of explicit forward guidance in the dataset requires an assessment anchored in industry dynamics and CNBM’s current financial posture. The stock appears attractively priced on a price-to-book basis (0.245x) and trades with a negative P/E, reflecting the earnings volatility and leverage risk. The near-term investment thesis hinges on potential stabilization in construction demand in China, a possible rebound in cement/construction materials volumes, and any ongoing corporate restructuring or portfolio optimization. Investors should monitor macro indicators (infrastructure spend, property market recovery), CNBM’s ability to stabilize gross margins, and progress in deleveraging or cash flow generation to assess a durable improvement in profitability.
Key Performance Indicators
Revenue
36.64B
QoQ: -21.13% | YoY:-35.96%
Gross Profit
6.93B
18.91% margin
QoQ: -4.24% | YoY:-45.48%
Operating Income
475.19M
QoQ: -35.79% | YoY:-90.73%
Net Income
-516.85M
QoQ: -29.88% | YoY:-154.45%
EPS
-0.07
QoQ: 14.02% | YoY:-161.91%
Revenue Trend
Margin Analysis
Key Insights
Operating Cash Flow per Share: -0.665 CNY
Free Cash Flow per Share: -1.053 CNY
Cash per Share: 3.64 CNY
Current Ratio: 0.833; Quick Ratio: 0.721; Cash Ratio: 0.149
Debt Ratio: 0.312; Debt/Equity: 1.360; Long-Term Debt to Capitalization: 0.497; Total Debt to Capitalization: 0.576
Financial Highlights
Revenue: 36,636,841,494 CNY; YoY -35.96%, QoQ -21.13%
Gross Profit: 6,926,749,509 CNY; Gross Margin 18.90%; YoY -45.48%, QoQ -4.24%
Operating Income: 475,187,370 CNY; Operating Margin 1.30%; YoY -90.73%, QoQ -35.79%
Net Income: -516,851,699 CNY; Net Margin -1.41%; YoY -154.45%, QoQ -29.88%
EPS: -0.0681 CNY; YoY -161.91%, QoQ +14.02%
EBITDA: 4,939,504,928 CNY; EBITDA Margin 13.48%
Income Before Tax: 465,054,556 CNY; Pre-tax Margin 1.27%
Income Tax Expense: 363,432,810 CNY
Cash Flow & Leverage:
- Operating Cash Flow per Share: -0.665 CNY
- Free Cash Flow per Share: -1.053 CNY
- Cash per Share: 3.64 CNY
- Current Ratio: 0.833; Quick Ratio: 0.721; Cash Ratio: 0.149
- Debt Ratio: 0.312; Debt/Equity: 1.360; Long-Term Debt to Capitalization: 0.497; Total Debt to Capitalization: 0.576
- P/BV: 0.245; P/S: 0.775; P/E: -13.73; Dividend Yield: 5.89%
- Return on Assets: -0.102%, Return on Equity: -0.446%, ROCE: 0.148%
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
36.64B
-35.96%
-21.13%
Gross Profit
6.93B
-45.48%
-4.24%
Operating Income
475.19M
-90.73%
-35.79%
Net Income
-516.85M
-154.45%
-29.88%
EPS
-0.07
-161.91%
14.02%
Key Financial Ratios
currentRatio
0.83
grossProfitMargin
18.9%
operatingProfitMargin
1.3%
netProfitMargin
-1.41%
returnOnAssets
-0.1%
returnOnEquity
-0.45%
debtEquityRatio
1.36
operatingCashFlowPerShare
$-0.67
freeCashFlowPerShare
$-1.05
dividendPayoutRatio
-323%
priceToBookRatio
0.25
priceEarningsRatio
-13.73
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript data provided in the dataset. Consequently, there are no management quotes or themes to summarize under transcript highlights.
N/A
— N/A
N/A
— N/A
Forward Guidance
No explicit forward guidance was provided in the dataset. Given CNBM’s QQ1 2025 performance, investors should watch for: (1) management commentary on cost optimization, asset utilization, and potential restructuring or portfolio optimization across Cement, Concrete, New Materials, and Engineering Services; (2) any announcements on deleveraging initiatives, asset impairments, or rebalancing of capex toward higher-return segments; (3) macro indicators affecting Chinese construction activity and infrastructure investment (infrastructure spend guidance, property sector stabilization, and urbanization trends); (4) changes in working capital efficiency and cash conversion cycles. Our assessment is cautious: near-term earnings visibility is constrained by macro headwinds and high leverage, but a stabilization in demand or improved margin realization could act as meaningful catalysts if supported by disciplined capital allocation.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
3323.HK Focus
18.91%
1.30%
-0.45%
-13.73%
0914.HK
22.90%
11.40%
0.95%
15.08%
1313.HK
16.30%
4.40%
0.24%
26.41%
1088.HK
34.10%
25.60%
3.39%
13.00%
1898.HK
24.60%
16.20%
2.55%
8.37%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Near-term investment stance remains cautious given the negative earnings trajectory, weak liquidity signals, and elevated leverage. However, CNBM trades at an attractive multiple to book value (P/B 0.245x) and offers a dividend yield of about 5.9%, which could support downside protection for longer-horizon holders if the company can stabilize cash flows. The key drivers for a potential re-rating are: (1) stabilization or rebound in Chinese construction activity and infrastructure spend; (2) demonstrable progress on deleveraging and improving cash conversion; (3) successful expansion of higher-margin New Materials and Engineering Services revenues; and (4) any signs of portfolio optimization that reduces capital intensity or improves asset utilization. Investors should monitor quarterly progression in gross margins, operating cash flow, and working capital efficiency, as well as management's updates on cost-control initiatives and capex allocation. In sum, the stock presents a high-risk, high-variance case with potential upside if macro conditions improve and CNBM executes a credible path to cash-flow positive growth.
Key Investment Factors
Growth Potential
Medium potential from New Materials and Engineering Services as CNBM leverages scale and integration to capture higher-margin opportunities beyond traditional cement/concrete; potential geographic diversification could offset China-centric exposure.
Profitability Risk
Key risks include sustained weakness in China's property market, volume declines in cement/construction materials, high leverage and weak liquidity, commodity and input cost volatility, and regulatory/policy shifts affecting infrastructure spending.
Financial Position
Capital intensity remains high with a moderate debt burden (Debt Ratio 0.312) and weak near-term cash flow generation (CFO per share -0.665, FCF per share -1.053). The company trades at a low P/BV (0.245x), suggesting a potential valuation floor but also reflecting earnings volatility and leverage risk.
SWOT Analysis
Strengths
Diversified product portfolio across cement, concrete, new materials, and services; broad geographic footprint.
Scale and asset base enabling potential cost advantages and vertical integration.
Earnings resilience in EBITDA terms despite a net loss, indicating some fixed-cost coverage at the EBITDA level.
Weaknesses
Net loss in QQ1 2025 and negative net margin (-1.41%).
Weak liquidity signals (Current ratio 0.83, Quick ratio 0.72, Cash ratio 0.15).
High leverage (Debt ratio 0.31; Debt/Equity 1.36) and substantial depreciation implying capital intensity.
Low earnings quality with negative net income and negative earnings per share.
Opportunities
China infrastructure stimulus could lift cement/construction materials volumes.
New Materials and Engineering Services segments could provide higher-margin growth paths.
Low P/BV valuation offers potential upside if earnings stabilize and cash flow improves.
Threats
China real estate downturn and continuing construction slowdowns.
Commodity price and energy cost volatility impacting input costs.
Regulatory/policy risk and competition in a fragmented cement and materials market.
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