Anhui Conch Remains Undervalued Despite Slow Recovery in the Cement Industry

Producing more than 300 million metric tons of cement annually, Anhui Conch Cement is one of the largest cement producers in the world. Closely tied to infrastructure and real estate construction, China’s cement industry is challenged by the shift toward a less construction-intensive economy. However, we believe Conch's strong balance sheet (net cash as of the end of 2022) and best-in-class mining assets position it best to weather slowing investment in China and achieve modest market share gains at the expense of overleveraged competitors.