Executive Summary
Dongwu Cement International Limited reported a challenging QQ4 2024, evidencing a material step-down in profitability despite a QoQ uplift in revenue. The quarter delivered HKD 116.99m in revenue, down 16.8% year-over-year, with a gross loss of HKD 6.11m and a gross margin of negative 5.22%. The company also posted an operating loss of HKD 28.91m and a net loss of HKD 22.76m (EPS -0.0412), underscoring persistent margin pressure in a competitive basic materials environment. On a positive note, QoQ revenue increased 9.73%, while balance sheet indicators show a defensible liquidity position supported by cash and cash equivalents of HKD 135.50m and total cash and short-term investments of HKD 342.36m, yielding a cash cushion to navigate near-term headwinds.
The cash flow profile remained weak on an ongoing basis with negative operating cash flow of HKD 18.47m and negative free cash flow of HKD 19.49m, though net cash provided by financing and investing activities contributed to a net increase in cash of HKD 93.74m for the period. Leverage remains moderate by balance-sheet standards (total debt HKD 300.6m; debt to equity 0.78), but interest coverage is negative (-4.36x) due to the current earnings trajectory, signaling that near-term profitability is the primary driver of credit and equity risk. The business appears to be at a crossroads where margin normalization and disciplined capital management are needed to restore earnings power.
Given the lack of an available earnings call transcript in the provided data, management commentary and forward-looking guidance could not be pulled directly from an official transcript. Investors should therefore anchor their view on the reported metrics, contemplated industry dynamics in China’s construction materials segment, and the company’s liquidity position as the primary guidance for evaluating a potential investment thesis. The stock warrants a cautious stance until there is visible improvement in gross margins, operating profitability, and a sustainable path to positive free cash flow.
Key Performance Indicators
QoQ: 21.84% | YoY:-342.63%
QoQ: 36.57% | YoY:-30.53%
QoQ: 36.62% | YoY:-30.38%
Key Insights
Revenue: HKD 116,991,000; YoY change: -16.78%; QoQ change: +9.73%
Gross Profit: HKD -6,107,000; Gross Margin: -5.22%; YoY change: -342.63%; QoQ change: +21.84%
Operating Income (EBIT): HKD -28,910,000; Operating Margin: -24.71%; YoY change: -22.74%; QoQ change: +8.43%
EBITDA: HKD -7,840,000; EBITDA Margin: -6.70%
Net Income: HKD -22,756,000; Net Margin: -19.45%; YoY change: -30.53%; QoQ change: +36.57%
EPS (basic/diluted): -0.0412; YoY: -30.38%; QoQ: +36.62%
Cash Flow Indicators: Operating cash ...
Financial Highlights
Revenue: HKD 116,991,000; YoY change: -16.78%; QoQ change: +9.73%
Gross Profit: HKD -6,107,000; Gross Margin: -5.22%; YoY change: -342.63%; QoQ change: +21.84%
Operating Income (EBIT): HKD -28,910,000; Operating Margin: -24.71%; YoY change: -22.74%; QoQ change: +8.43%
EBITDA: HKD -7,840,000; EBITDA Margin: -6.70%
Net Income: HKD -22,756,000; Net Margin: -19.45%; YoY change: -30.53%; QoQ change: +36.57%
EPS (basic/diluted): -0.0412; YoY: -30.38%; QoQ: +36.62%
Cash Flow Indicators: Operating cash flow -HKD 18.47m; Free cash flow -HKD 19.49m; Net cash from operating activities -HKD 18.47m; Net cash used for investing activities -HKD 107.59m; Net cash provided by financing activities HKD 2.39m; Net change in cash HKD +93.74m; Cash at end of period HKD 151.43m; Cash and cash equivalents HKD 135.50m; Short-term investments HKD 206.87m; Total cash and short-term investments HKD 342.36m
Balance Sheet Indicators: Total assets HKD 1,042,235,000; Total liabilities HKD 565,390,000; Total stockholders’ equity HKD 387,315,000; Current ratio 1.60; Quick ratio 1.08; Cash ratio 0.35
Liquidity & Leverage: Short-term debt HKD 171,986,000; Long-term debt HKD 128,614,000; Total debt HKD 300,600,000; Net debt HKD 165,105,000; Debt to equity 0.78; Debt ratio 0.29; Interest coverage -4.36x (negative due to losses)
Notes: Net income per share and diluted EPS reflect a quarterly loss with weighted average shares outstanding 552,000,000.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
116.99M |
-16.78% |
9.73% |
| Gross Profit |
-6.11M |
-342.63% |
21.84% |
| Operating Income |
-28.91M |
-22.74% |
8.43% |
| Net Income |
-22.76M |
-30.53% |
36.57% |
| EPS |
-0.04 |
-30.38% |
36.62% |
Key Financial Ratios
operatingProfitMargin
-24.7%
operatingCashFlowPerShare
$-0.03
freeCashFlowPerShare
$-0.04
dividendPayoutRatio
-330%
priceEarningsRatio
-15.59
Management Commentary
No earnings call transcript was provided in the data; therefore, no management commentary or themes could be distilled. The analysis relies on disclosed quarterly results and balance-sheet metrics to infer key dynamics such as margin compression, liquidity posture, and capital deployment.
Forward Guidance
Management guidance for QQ4 2024 is not provided in the supplied data. Based on the reported figures and sector dynamics, the plausible trajectory hinges on: (1) stabilization or improvement in cement selling prices and volume through infrastructure investment and urban development; (2) continued cost discipline and optimization of fixed-cost absorption to drive gross margins back toward positive territory; (3) balance-sheet discipline to reduce negative free cash flow and improve interest coverage. A base-case assumption would expect revenue stabilization with a gradual margin recovery only if input costs ease and plant utilization improves. Monitor: (a) quarterly progression of gross margin and operating margin; (b) working capital efficiency (DSO, DIO, CCC); (c) debt maturity profile and refinancing risk; (d) any strategic asset optimization or divestitures that could unlock capital for debt reduction or capex reallocation.