Our valuation for Anhui Conch Cement-H is based on a PB-ROE methodology, which is widely used in the China materials space. We value Conch-H shares at HK$28 based on 0.7x 2025E P/B, which is -1SD below the stock’s historical average since 2016 to reflect a cement demand downcycle due to a slump in property demand .

Downside risks that could prevent Conch-H shares from achieving our target price include: 1) Slowdown in property FSS or FAI growth and thus weaker-than-expected cement demand and price; 2) More-than-expected new cement capacity additions; and 3) Higher-than-expected coal prices.