上峰水泥（000672）：短期复苏持续，战略链条将保持增长。

Near-TermRecoverySustained,Strategic ChainstoRetain Growth Rating (Maintain):BUYTarget price (RMB):10.31 Huatai Research Annual Results Review 13 May 2025│China (Mainland) Cement AnalystFANG YanheSAC No. S0570517080007SFC No. BPW811fangyanhe@htsc.com+(86) 755 2266 0892 ShangfengCement(Shangfeng)posted2024revenue/attributablenetprofit(NP)/recurring attributable NP of RMB5.45/0.63/0.47bn (-14.8/-15.7/-25.3% yoy).The attributable NP beat our estimate of RMB0.59bn, likely due to favorable cementclinker repricing and higher investment income from the new economy industrialfund, in our view. In 1Q25/4Q24, revenue reached RMB0.95/1.63bn (+4.6/+7.4%yoy); attributable NP was RMB0.08/0.22bn (+447.6/+409.8% yoy), demonstratingsustained positive momentum in short-term operations. The company continued toimprove its balance sheet and cash flow, and released its new five-year plan(2025-2029), detailing the core cementbuilding materials chain, new economyequity investment chain, and secondprofitgrowthdrivers. We are bullish onShangfeng's solid core business and attractive dividend yield. Maintain BUY. AnalystHUANG YingSAC No. S0570522030002SFC No. BSH293huangying018854@htsc.com+(86) 21 2897 2228 Key data Clinker repricing on track, cost-efficiency improvement ongoingIn 2024, Shangfeng sold 20.75mn tonnes of cement clinker, down 3.3% yoy, outperforming the national cement output decline of 9.5%. Cement clinker revenuewas RMB4.76bn (87% of total revenue), down 10.8% yoy. We estimate theper-tonne price/gross profit at RMB230/55, down RMB19/5 yoy. We attribute thesmaller decline in per-tonne gross profit mainly to the ongoing cost reduction andefficiency improvement, with notable decreases in fuel, power, and other costs.Overall gross profit margin (GPM) was 26.2% for 2024, down 1.6pp yoy. However,supported by industry-wide and company-specific measures such as staggeredproduction, Shangfeng's 1Q25 GPM rose to 27.4%, up 1.2pp vs 2024. Balance sheet strong, new five-year plan targets growth & dividendsAs of end-2024, Shangfeng held RMB2.67/1.24bn in cash/trading financial assets,alongwithentrustedloans andcertificatesofdeposittotalingRMB1,352mn.Year-end debt-to-asset ratio dropped 1.44pp yoy to 45.1%, reflecting a robustbalance sheet. By end-1Q25, interest-bearing debt stood at RMB4.16bn, withrepaymentsofmaturingfinancingprogressingsteadily.Thenewlyreleasedfive-year plan maintains focus on the 'one core, two wings' strategy, targeting 2029annual capacities of 30/20/40mn tonnes for cement/clinker/aggregates, up fromthe current 20/18/18mn tonnes.Annual net operating cash inflows for 2022-2024all exceeded RMB1bn. Shangfeng also announced a minimum dividend payout of35% or at least RMB400mn annually for 2024-2026. Based on a DPS of RMB0.63in 2024 (total dividend RMB600mn), current dividend yield stands at 7.5%. Source:Wind Earningsforecast andvaluationConsidering that the company's core operating region -the Yangtze River Delta-ispoised to play a greater role in driving economic growth,we raise our clinker salesassumption. Given the solid execution of industry-wide staggered production in theshort term and growing supply constraints in the medium to long term, we also liftour assumptions for per-tonne price/gross profit for cement clinker. We now project2025/2026/2027attributableNPatRMB740/790/850mn(previous:RMB630/680mn for 2025/2026, revised up by 16.8/16.5%). Factoring in higher per-tonnegross profit expectations and a clear medium-to long-term development roadmap,we raise our target price by 23% to RMB10.31, based on 1.1x our 2025E BVPSforecast of RMB9.37, representing a 15% discount to its average PB since 2016. Risks:slowerpropertysalesrallyandweakerimplementationofstaggeredproduction than we expect. Source:Wind, Huatai Research Source:Wind, Huatai Research Fullfinancials Disclaimers Analyst CertificationI/We, FANG Yanhe, HUANG Ying, hereby certify that the views expressed in this report accurately reflect the personal views of the analyst(s) about the subject securities or issuers; and no part of the compensation of the analyst(s)was, is, or will be, directlyor indirectly, related to the inclusion of specific recommendations or views in this report. General Disclaimers and DisclosuresThis research report has been prepared by Huatai Financial Holdings (Hong Kong) Limited (herei nafter referred to as“HFHL”).The information herein is strictly confidential to the recipient. This report is intended for HFHL, its clients and associatedcompanies. Any other person shall not be deemed a client of the Company merely from his or her receipt of this report. This report is based on information deemed reliable and publicly available by HFHL, but HFHL and its associated company(ies)(collectively, hereinafter“Huatai”)makes no guarantee as to the accuracy or completeness of such information. The opinions, assessments and projections contained herein only reflect the views and judgments at the issuance date. Huataim