CPMC Holdings (906 HK): Healthy 1H21 Despite Rising Cost, Highlights from Post-Result Call

CPMC (906 HK): Cost Pressure Appears Controlled While Demand Looks Firm

CPMC Holdings (906 HK): Short Term Tough but Long Term Story Intact

China Analyst - Equity Long-Short, Onshore Credit

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>Underpinned by higher ASP and sequentially lower input costs, <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a> should achieve better margin in 2H22. Its 17% fall in share price YTD makes it appealing.</li>
<li>Average aluminum price was down 14% so far in 2H22, vs. 1H21, good to its costs. Well-controlled selling and administrative costs will help to support profitability recovery.</li>
<li>New two-piece can capacity will grow by 54% over the next three years as 5 production lines are expected to be added. Most of them already have demand lined up.</li>
</ul>


Underpinned by higher ASP and sequentially lower input costs, CPMC Holdings (906 HK) should achieve better margin in 2H22. Its 17% fall in share price YTD makes it appealing.
Average aluminum price was down 14% so far in 2H22, vs. 1H21, good to its costs. Well-controlled selling and administrative costs will help to support profitability recovery.
New two-piece can capacity will grow by 54% over the next three years as 5 production lines are expected to be added. Most of them already have demand lined up.


CPMC Holdings (906 HK): Good Time to Re-Visit