To The Moon

$Anhui Conch Cement Co., Ltd.(AHCHF)$ $Anhui Conch Cement Company Limited(600585)$ $Anhui Conch Cement Co., Ltd.(AHCHY)$ 

Aiming to maintain market share

Anhui Conch is one of the largest cement producers globally with more than 200m metric tons of annual cement production. It has a leading position in eastern and southern China. Anhui has a track record of managing its costs well in the past, which should help in supporting margin pressures during downturns. Given its strong capital position (in net cash as of end 2021), the company is also positioned to make strategic acquisitions, of which it is on the lookout given industry consolidation expected ahead. Near term risks to monitor include cement demand softness, margin pressures and regulatory risks. While Anhui’s supportive dividend yield and strong balance sheet position are positives, its ESG track record has lagged industry peers and is rated below average by research. FY21 dividend payout ratio of 38% was increased from 32% in 2020, given its net cash position. In terms of carbon management efforts, management has announced in August 2021 targets to reduce emissions by 1% in 2021, 5% by 2025 and 15% by 2023. 

From the looks of It, it looks to be ready to capture more sales from the recovery in the Chinese market. However, I am still a little cautios about this stock as the real estate sector looks to be bartered at the moment andit will take some time for the recovery. Further, global macro risks remain elevated at themoment. 

@TigerStars 

DYODD