Anhui Conch Profit Rises 13% on Construction Demand
Anhui Conch Cement Co. (914), China's biggest maker of the building material, said third-quarter profit rose 13 percent as investment in railways and other infrastructure in the country created more construction demand.
Net income increased to 704.3 million yuan ($103.1 million), or 0.40 yuan, from 621.6 million yuan, or 0.40 yuan, a year earlier, the company said in a statement to the Shanghai stock exchange. Sales rose 40 percent to 6.5 million yuan.
China's economy grew at the slowest pace in five years in the third quarter as export orders dropped and property sales plunged. Conch may cut cement prices early next year and be more ``cautious'' in future expansion, Board Secretary Zhang Mingjing said Oct. 15.
``It's hard to see that real-estate investment will pick up soon in 2009,'' Jay Zhou, a Shanghai-based analyst at Sinopec Asia Securities, said before the announcement. ``There are many forecasts that cement prices will dip.''
Conch fell 4.2 percent in Hong Kong trading to close at HK$23 today, before the earnings announcement.
China is the world's biggest consumer of cement. Some analysts are more optimistic on the outlook for cement. Demand for the material will remain strong this year, boosted by spending to expand railways and other infrastructure, JPMorgan Chase & Co. economist Grace Ng said in a Sept. 29 note.
Housing prices in Shanghai, China's biggest financial center, fell 20 percent in the third quarter from the previous three months, Savills Plc said last week.
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