Anhui Conch Expects 06 net more than doubled

Anhui Conch Expects 06 net more than doubled
Published: 29 January 2007

Anhui Conch Cement Co Monday it expects its 2006 net profit more than doubled from a year earlier due to strong earnings in the January-September period.

The cement producer posted a net profit of CNY406.89m for 2005 based on Chinese accounting standards.

Analysts said the profit forecast didn’t come as a surprise given the company had already reported strong nine-month results.

Anhui Conch had a net profit of CNY826.5m in the nine months ended September, up from CNY226.9m in the same period a year earlier, also based on Chinese accounting standards, the company said in October.

Analysts said Anhui Conch’s earnings outlook in 2007 should remain solid despite China’s effort to rein in the country’s fast-growing sectors such as cement and property.

As a major company in the cement industry, it should benefit from consolidation in the sector, analysts said. Beijing said earlier it will revamp the inefficient sector with new rules intended to cut the number of companies to 2,000 from 5,000 by 2020.

"2007 will still do fairly OK," said an analyst at an international investment bank who declined to be named.

"I don’t see any real threat posed to the company even though China tries to put a brake to curb growth at its property sector."