Despite Sluggish Cement Demand, We Expect Price Upticks to Support CRBM's Margin Recovery

China Resources Building Materials, or CRBM, is a leader in Southern China’s cement industry, with annual production capacity of over 100 million metric tons in 2024. Centered around infrastructure and real estate demand, China’s cement industry sees challenges from a material shift toward a less construction-intensive economy. Cement’s oversupply may also require multiple years to normalize as high energy-waste peers gradually exit. However, we believe CRBM is well-positioned to remain a top cement producer in provinces such as Guangdong and Guangxi, thanks to its rich mining rights resources, advanced technologies in carbon recycling, and robust distribution network. While domestic cement and related sectors should remain fragmented, we think CRBM should raise its market share though ongoing consolidations.