Beijing New Building Materials Public Limited Company released its 2025 interim report, showing operating revenue of RMB 13.558 billion in the first half, down 0.29% year-on-year; net profit attributable to shareholders of RMB 1.930 billion, down 12.85% year-on-year; non-GAAP net profit attributable to shareholders of RMB 1.892 billion, down 12.35% year-on-year, with basic earnings per share of RMB 1.14.
Commentary:
Waterproofing and coating businesses maintained growth, while declines in gypsum board and keel businesses dragged down total operating revenue. The company's lightweight building materials business achieved operating revenue of RMB 8.901 billion in the first half, down 8.67% year-on-year. Among these, gypsum board business generated operating revenue of RMB 6.677 billion, down 8.57% year-on-year; keel business reached RMB 1.137 billion, down 10.72% year-on-year.
Waterproofing materials achieved operating revenue of RMB 2.494 billion, up 5.99% year-on-year, with waterproofing membranes contributing RMB 1.720 billion, up 0.63% year-on-year. Coating materials business achieved operating revenue of RMB 2.163 billion, up 44.42% year-on-year. The high growth in the company's coating business was mainly due to the consolidation of Zhejiang Daqiao Paint Co., Ltd. on February 28.
Under the continued downturn in real estate, the company's gypsum board and keel businesses were affected, but the waterproofing materials business still maintained counter-trend growth. Meanwhile, through the acquisition of Zhejiang Daqiao Paint and external expansion, the company further developed its coating business. The company's "two wings" businesses maintained sustained development momentum.
Profitability remained relatively stable with a slight decrease in debt ratio. The company's comprehensive gross margin was 30.35% in the first half of 2025, down 0.59 percentage points year-on-year, mainly due to declining gross margins in gypsum board and waterproofing membranes. The gross margins for gypsum board and waterproofing membranes in the first half were 38.68% and 16.97% respectively, down 0.94 and 2.34 percentage points year-on-year. However, gross margins for keel and coatings improved year-on-year, reaching 21.65% and 31.79% respectively, up 0.43 and 0.51 percentage points year-on-year. The company's asset-liability ratio at the end of Q2 was 23.01%, down 5.99 percentage points year-on-year and 1.04 percentage points quarter-on-quarter. The non-GAAP ROE was 7.10%, down 1.71 percentage points year-on-year. Under intensifying industry competition, the company maintained relatively stable profitability levels.
Strong risk resistance capability, building momentum for new growth. As an industry leader, the company demonstrates strong risk resistance in a persistently weak industry environment and maintains steady operations. It also possesses counter-trend development capabilities, achieving reverse growth through both internal organic growth (waterproofing materials counter-trend growth, with the company actively building Quanjiao Waterproofing Materials Industrial Park and planning to build a 20,000-ton industrial coating production base in Anqing) and external expansion (acquisitions of Carpoly and Zhejiang Daqiao Paint) under challenging industry conditions, becoming a long-term beneficiary and building momentum for future development and nurturing new growth.
Meanwhile, given the high market share of gypsum board in China, the company is actively expanding overseas development opportunities. The Tanzania and Uzbekistan production bases achieved double-digit growth in both revenue and profit in the first half of 2025. The Thailand 40 million square meter gypsum board facility has entered trial production, and the Bosnia and Herzegovina project is also progressing.
Company profit forecast and investment rating: We expect the company's net profit for 2025-2027 to be RMB 3.787 billion, RMB 4.060 billion, and RMB 4.615 billion respectively, corresponding to EPS of RMB 2.24, RMB 2.40, and RMB 2.73. At current stock prices, the corresponding P/E ratios for 2025-2027 are 11.96x, 11.16x, and 9.82x respectively. Considering the company's risk resistance capability and its ability to build development momentum through both internal and external means under challenging industry conditions, we maintain a "Strong Buy" rating.
Risk warning: Industry downturn persistence exceeding expectations
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