West China Cement (2233) AI Stock Analysis

• Market Cap: HK$15.90B
• Dividend Yield: 1.27%
• Average Volume (3M): 42.61M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.82
• Revenue Growth: 20.56%
• EPS Growth: 254.64%
• Country: HK
• Employees: 9,504
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Construction Materials
• EPS (TTM): 0.15
• Shares Outstanding: 5,462,532,700
• 10 Day Avg. Volume: 48,984,311
• 30 Day Avg. Volume: 42,607,974
• PEG Ratio: 0.30
• Price to Book (P/B): 0.66
• Price to Sales (P/S): 0.97
• P/FCF Ratio: -44.48
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$3.74
• Price Target Upside: 28.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: HK$3.00 ▲(3.09% Upside)

The overall stock score of 60 reflects mixed financial performance and technical indicators. While operational efficiency and a strong asset base are positives, concerns about revenue decline, higher leverage, and negative cash flow weigh heavily. The technical analysis suggests neutral momentum, and the valuation indicates moderate pricing with limited income potential.

Positive Factors

Operational Efficiency

The company's operational efficiency ensures cost-effective production, enhancing profitability and competitive positioning in the market.

Strategic Partnerships

These partnerships secure a steady demand for products, supporting revenue stability and growth, particularly in large-scale infrastructure projects.

Market Position

The company's strong market position in a high-growth region supports long-term demand, driven by urbanization and infrastructure development.

Negative Factors

Revenue Decline

The decline in revenue and net income indicates potential challenges in maintaining growth, affecting long-term financial health and investor confidence.

Higher Leverage

Increased leverage can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Negative Cash Flow

Negative cash flow highlights liquidity concerns, limiting the company's ability to fund operations and growth initiatives without external financing.

West China Cement Business Overview & Revenue Model

Company Description

West China Cement Limited, an investment holding company, manufactures and sells cement and cement products in the People's Republic of China. It sells its products under the Yao Bai and Yaobaishuini names. The company's cement products are used in the construction of infrastructure projects, such as highways, railways, bridges, hydroelectric power stations, and water conservancy and water transfer projects, as well as housing and social infrastructure projects. It also engages in financial leasing and transportation businesses. The company is headquartered in Xi'an, the People's Republic of China.

How the Company Makes Money

West China Cement generates revenue primarily through the sale of its cement products, which constitute the bulk of its income. The company benefits from a diverse customer base, including state-owned enterprises, large construction firms, and small to medium-sized contractors. Key revenue streams include the direct sale of cement, ready-mix concrete, and other related materials. Additionally, West China Cement has established strategic partnerships with construction firms and government entities for large-scale infrastructure projects, ensuring a steady demand for its products. The company's ability to maintain cost efficiencies in production, coupled with its strategic positioning in regions experiencing significant growth, contributes to its overall earnings.

West China Cement Financial Statement Overview

Summary

West China Cement shows operational efficiency and a strong asset base, but recent declines in revenue and net income, higher leverage, and negative cash flow indicate potential financial concerns.

Income Statement

The company's revenue has shown fluctuations over the years, with a decline from 2023 to 2024. The gross profit and net profit margins have been generally healthy, but there was a notable decrease in net income in 2024 compared to 2023, impacting the overall profitability. The EBIT and EBITDA margins remained stable, indicating consistent operational efficiency.

Balance Sheet

West China Cement maintains a solid equity base with a relatively stable equity ratio. However, the debt-to-equity ratio has increased, reflecting a higher leverage position, which could pose risks if not managed carefully. Return on equity has weakened due to lower net income, but the company still shows a strong asset base.

Cash Flow

The cash flow situation presents challenges, with a negative free cash flow and an absence of operating cash flow in 2024. The company previously relied on positive operating cash flows, but the recent figures highlight potential liquidity concerns. The company's ability to convert net income to cash has been inconsistent, affecting overall financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.06B	8.34B	9.02B	8.49B	8.00B	7.13B
Gross Profit	2.65B	1.97B	2.46B	2.18B	2.38B	2.34B
EBITDA	3.08B	2.33B	2.62B	3.22B	3.43B	2.91B
Net Income	987.56M	626.18M	421.28M	1.21B	1.59B	1.56B
Balance Sheet
Total Assets	35.79B	36.29B	32.90B	30.24B	26.65B	18.91B
Cash, Cash Equivalents and Short-Term Investments	854.48M	1.16B	922.66M	1.42B	3.59B	751.46M
Total Debt	11.70B	11.56B	10.68B	9.53B	9.13B	3.71B
Total Liabilities	21.45B	22.47B	18.73B	16.85B	14.86B	8.38B
Stockholders Equity	12.72B	12.27B	12.28B	12.03B	11.31B	10.33B
Cash Flow
Free Cash Flow	-743.07M	-181.88M	-224.02M	-826.78M	-1.84B	-259.73M
Operating Cash Flow	1.29B	2.04B	2.70B	2.13B	1.96B	2.68B
Investing Cash Flow	-905.56M	-1.88B	-3.35B	-3.28B	-3.52B	-3.12B
Financing Cash Flow	-505.45M	85.46M	139.81M	-1.08B	4.45B	322.04M

West China Cement Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2.91
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2233, the sentiment is Neutral. The current price of 2.91 is below the 20-day moving average (MA) of 2.97, below the 50-day MA of 3.08, and above the 200-day MA of 2.20, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 45.09 is Neutral, neither overbought nor oversold. The STOCH value of 17.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:2233.

West China Cement Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6655	77 Outperform	HK$47.37B	10.16	10.68%	5.01%	0.40%	62.35%
0914	65 Neutral	$126.62B	11.91	4.59%	4.63%	-28.50%	23.92%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
2233	60 Neutral	HK$15.90B	14.95	7.74%	1.27%	20.56%	254.64%
0691	48 Neutral	HK$2.96B	19.21	0.80%	―	-14.85%	―
1252	48 Neutral	HK$878.74M	2.41	2.15%	―	0.18%	―
1313	45 Neutral	$10.89B	43.45	0.51%	1.54%	―	―

West China Cement Corporate Events

West China Cement Issues US$400 Million in Senior Notes

West China Cement Limited announced the issuance of US$400 million in 9.90% senior notes due in 2028. The notes, offered outside the United States, are part of a strategic financial maneuver to strengthen the company’s capital structure and support its growth initiatives. The issuance involves key financial institutions, including China International Capital Corporation, HSBC, and J.P. Morgan, as joint global coordinators and initial purchasers, highlighting the company’s strong market positioning and investor confidence.