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CNBM Gained Net Profit of RMB 4.74 Billion Yuan in 2010

Source: CNBM at 14:52:27 on April 6, 2011

China National Building Material Company Limited (hereafter referred to as CNBM) released the 2010 Annual Results Announcement the other day. On April 4, Chairman of the Board Song Zhiping and his management team convened an annual results press conference in Hong Kong and reported to the capital market and investors on the company’s operations in the year 2010.

The operating revenue of CNBM in 2010 was RMB 51.988 billion yuan, a 56.1% year-on-year growth rate. The operating profit was RMB 8.485 billion yuan, a 61.6% year-on-year growth rate. The net profit was RMB 4.74 billion yuan, a 54.1% year-on-year growth rate. The net profit attributable to the parent companywas RMB 3.369 billion yuan, a 43.2% year-on-year growth rate. The earnings per share was RMB 1.33 yuan, a 38.5% year-on-year growth rate. The dividend per share was RMB 0.186 yuan (Incl. the tax), a 165.7% year-on-year growth rate. In addition, each shareholder was issued with 10 bonus shares for each 10 shares they held. Thus CNBM delivered its excellent performance report to the shareholders and overseas investors in the last year of the 11th5-year Plan.

Mr. Song Zhiping expressed his sincere gratitude to the investors, analysts and media for their longstanding support and concern forCNBM. He said 2011 marked the 5thyear since CNBM was listed in Hong Kong Stock Exchange. Over the past 5 years, CNBM made a leap-forward growth and became the leading player in China with the CAGRs of the operating profit, net profit and EPS being 73.2%, 57.3% and 46.3% respectively, contributing great returns to all shareholders and investors and fulfilling its commitment (made when it was listed) to the capital market.

Thanks to the rapid economic growth in China and the recovery of the global economy, and China’s favorite policies such as “adjusting the economic structure and changing the economic growth mode”, etc., CNBM was proactive in grasping the opportunities and meeting the challenges in 2010. By implementing the established strategies, pushing forward the regional restructuring and technology upgrading, expanding the scale and optimizing the productive capacity layout, CNBM had consolidated its leading position in the market. At the same time, CNBM also continued its efforts to carry out its management integration, consolidation and reorganization, resulting in greater synergy effects. The profitability of the cement sector had been rising considerably. On the other hand, CNBM had upgraded the industry value and brought about the change of the development concepts. The lightweight building materials, rotor blades for wind power stations and engineering services of CNBM were still in the leading position for they had fulfilled their business layouts, developed their high-power products and transformed their strategies. Besides, CNBM continued to push forward the capital operation, finalized the lightning placing, conducted the multi-channeled and multi-layered equity financing, optimized the debt structure and reduced the debt ratio, producing the most satisfying results for the capital market again.

In 2010, all the four main sectors of CNBM made wonderful results.

The prices of the cement products recovered and rose, thus buffering the pressure brought by the price rise of raw materials and fuels such as coal and greatly improving the profitability. The cement sector of CNBM harvested RMB 37.953 billion yuan in the operating revenue, a year-on-year growth rate of 62.2%. The operating profit reached RMB 6.403 billion yuan, a year-on-year growth rate of 89.2%. The leading positions of CNBM’s other three main sectors continued to be number one with their sales volume reaching 152 million tones, a year-on-year growth rate of 34.0%. The sales structure continued to be optimized with the rising sales in high-grade cement. Meanwhile, CNBM steadily carried out the consolidation and reorganization, and the technological upgrading projects in Huaihai Region, Southeast China and North China. The production capacity rose from 160 million tons to 200 million tons with the capacity layout optimized.

As for the lightweight building material sector, the 1 billion square metersgypsum board capacity layout was rapidly accomplished, occupying the high-end market with the brand advantage and quality systematic service. The output and sales of gypsum boards rose considerably, generating the steady profit growth. The sales revenue stood at RMB 4.353 billion, a year-on-year growth rate of 33.7%. The sales volume reached 654 million square meters, a year-on-year growth rate of 37.7%. By optimizing the gypsum board marketing channels, intensifying the promotions and winning the bids for major projects and landmark buildings, CNBM expanded the sales significantly. At the same time, the Company seized the opportunity brought by the Central Government encouraging the development of housing for the low-income families, collaborated with the local governments to build the quality housing for the low-income population, laying a solid foundation for the greater involvement in the large-scale development of housing for low-income families and new countryside program in the future.

As for the sector of the composite materials and glass fiber, the output and sales volume of fan blades rose rapidly with the profit meeting the expectations. The production capacity was 15,000 blades with the sales volume reaching 6,699 blades, a year-on-year growth rate of 78.7% and continuing to take the leading position in China. Confronted with the fierce competition in China in the low-end fan blades, the sector actively adjusted the product portfolio and developed the high-end products. The 3MW fan blades were in mass production and the 5MW fan blades which were the most advanced in the world had been successfully produced on the production line. Besides, the strategic investment of US$130 million was introduced to the fan blade business, ensuring the financial capability to maintain the leading position and expand the business layout.

Compared with 2009, the sales volume, prices, gross margins and profit of the glass fiber rose considerably in 2010. The sector seized the opportunity brought by the demand recovery in the international glass fiber market, adjusted the sales mode, optimized the pricing system and worked hard to explore the markets. At the same time, it enhanced the technological innovations, reformed the raw material procurement contract modes and controlled the cost rationally to effectively buffer the pressure of the rising raw material prices.

As for the engineering service sector, the orders were rising rapidly with its profit occupying the leading position among its competitors. In 2010, the revenue was RMB 5.096 billion yuan, a year-on-year growth rate of 41.9%. The sector seized the opportunity brought by the Central Government’s policy of adjusting the economic growth mode and developing a low-carbon economy and a circular economy. Through developing the markets in the new glass, alternative and new materials engineering service, the sector, via the provision of the engineering services, also accelerated the development of equipment manufacturing. It rapidly finalized the strategic shift from the dependence on the traditional building material technical service to the cement engineering contracting, solar energy and optoelectronic display technology service based on the glass engineering services.


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