Event:
Anhui Conch Cement released its Q3 2008 report on Oct 22, 2008: the company realized turnover of Rmb16.675bn, up by 28.55% compared with the same period of 2007, net profit attributable to shareholders of listed companies of Rmb2.018bn, up by 34.27% than the corresponding period of 2007 and EPS of Rmb1.22.
Our analysis and estimation:
Cost hikes resulted in composite gross margin decline. In the first three quarters of 2008, price of energy sources like coal, electric power and diesel oil sharply surged, and accordingly composite average cost of the group mounted up, thereinto energy sources expenditure accounted for over 60% of total cost. During the first half, 17 sets of waste heat generators were put into operation, which saved cost for around Rmb353mn and relieved cost pressure to some degree. Q1-Q3 composite gross profit margin reached 26.71%, down 3.1ppt yoy.
During the period under view, three period expenses were under control and made up 12.83% of core business revenue, 1ppt down compared with the ratio 13.86% in 2007. Owing to the effective control, the company realized operating profit of Rmb2.211bn (+11.83% yoy), total profit of Rmb2.430bn (+9.09% yoy) and kept growing momentum.