According to the report released by CICC, they maintain their 'Outperform' rating for CR Building Materials Technology (01313), with a target price of HKD2.5 and a 2024/25E net income attributable to shareholders of RMB0.851 billion / 1.265 billion unchanged. In 1H24, the company's revenue was RMB10.31 billion, a year-on-year decrease of 13.9%, and the net profit attributable to shareholders was RMB0.166 billion, a year-on-year decrease of 70.2%. Among them, the company's revenue in 2Q24 was RMB5.52 billion, a year-on-year decrease of 20.0%, and the net profit attributable to shareholders was RMB0.195 billion, a year-on-year decrease of 66.8%. The company's 1H24 performance was in line with the expectations of the bank.

According to the report, since mid-to-late June, the core market of the company, the southern region of China, has started to raise the price of cement. The cumulative increase has reached 50-60 yuan/ton, and according to CRU, the mainstream price level in the Guangdong and Guangxi markets has continued to maintain, without large-scale loosening.

The bank believes that the downward pressure on the company's profits in the first half of the year is mainly due to the lower unit selling price and profit per ton. However, the recent successful price increases may indicate that the company's profit bottom has been confirmed. If the situation of infrastructure funding improves gradually in the second half of the year and there is room for marginal improvement in demand during the peak season, and there is still room for further price increases, the profit improvement brought by the price and volume increases in the second half of the year is expected. In addition, the production and sales of the company's aggregate business are also rapidly increasing, and revenue and profit contributions are expected to continue to increase, further supporting the company's performance improvement.