China National Building Material Shares Fall After Swinging to First-Half Loss

Shares of China National Building Material Co., Ltd. (03323.HK) dropped nearly 4% in Hong Kong trading after the company reported a swing to a net loss for the first half of the year, driven by persistent weakness in its core building materials segment.

As of late morning trading, the stock was down 3.89% to HK$3.46, with a turnover of HK$83.2 million.

First-Half Financials

According to its mid-year earnings release, the state-owned building materials giant posted a net loss attributable to shareholders of ¥829 million (Chinese yuan). This marks a significant reversal from the ¥1.36 billion net profit recorded in the same period a year prior.

Revenue for the period saw a modest decline of 2.2% year-over-year to ¥81.48 billion. The reported loss was slightly narrower than the company's previous forecast, which had guided for a loss of approximately ¥890 million.

Core Business Under Pressure

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In a research note, analysts at Huatai Securities attributed the loss primarily to the foundational building materials segment, which is grappling with falling prices and sluggish demand amid a broader slowdown. The note highlighted that nationwide fixed-asset investment, real estate development, and infrastructure investment all declined year-over-year in the first half.

This challenging market environment heavily impacted pricing and sales volumes for the company's main products:

• Cement Clinker: The average selling price (ASP) fell 16.7% year-over-year to ¥208 per ton.
• Ready-Mix Concrete: Sales volume decreased by 5.0%, while its ASP dropped by 14.8%.
• Aggregates: While sales volume grew 4.3%, the ASP declined by 11.3%.

New Materials a Bright Spot

Despite the downturn in its traditional business, the company’s new materials division provided a crucial buffer. According to the Huatai Securities note, this segment achieved growth in both revenue and profit, becoming an important pillar of support for the company's overall profitability.