China National Building (3323.HK) Q2 2024 Earnings Report

China National Building Material Company Limited (CNBM) reported Q2 2024 results that show a mixed trajectory: quarterly revenue rose 25.5% QoQ to 46.45 billion CNY, driven by seasonality and higher volumes, but net income remained negative at -397.9 million CNY. The quarter delivered an EBITDA of 3.89 billion CNY with an EBITDA margin of 8.4% and an operating margin of 1.59%, underscored by heavy depreciation and a sizable cost base. Net income declined on a YoY basis by 156.7%, though QoQ net income improved meaningfully from a loss path in the prior year period. Free cash flow generation was robust in the quarter at 4.06 billion CNY, aided by strong operating cash flow (8.98 billion) and moderate capex (4.92 billion). The balance sheet remains leveraged, with net debt of approximately 176.6 billion CNY and a debt-to-capitalization ratio of about 0.633, signaling elevated financial risk even as liquidity indicators (cash and short-term investments around 31.3 billion CNY; current ratio near 0.83) remain fragile. Management commentary is not provided in the transcript excerpt, limiting explicit forward guidance. Investors should weigh CNBM’s near-term cash generation and deleveraging needs against its high leverage and ongoing sector headwinds from China’s property downturn. In summary, CNBM exhibits positive near-term cash flow and revenue seasonality-driven upside but carries material earnings risk and leverage that require monitoring as macro policy and property market dynamics evolve.