Research Dispatch | Shangfeng Cement receives research visits from two institutions including Cathay Securities and Haitong Securities. The three-pronged strategy is being implemented: a total dividend of 3.8 billion, with 2 billion invested in the semiconductor industry chain.

Basic Research Information

On March 27, 2026, Gansu Shangfeng Cement Co., Ltd. (hereinafter referred to as “Shangfeng Cement”) hosted a specific group of investigators at the Xixi Valley Creative Industry Park, No. 738 Wen’er West Road, Hangzhou. Participating institutions in this research included two organizations: Guotai Haitong and Shenwan Lingtong Fund. Attending the reception were Yu Feng, Chairman and President of the company; Gui Hui, Secretary of the Party Committee, Director, Vice President and Board Secretary; and Wang Jiejie, Assistant to the Chairman.

Company Strategy and Business Progress

A Clearly Defined “Three-Carriage” Strategy: Coordinated Development of Building Materials, Investments, and New-Quality Materials

Since Shangfeng Cement formulated its five-year plan in 2019, it has gradually formed a business layout of the “three-carriage” model: cement and building materials as the cornerstone business, equity investment capital as the capital business, and new-quality materials as the growth business. The company said it will advance all three businesses in parallel to achieve steady development.

Building Materials Cornerstone Business: Gross Margin No. 1 in the Industry for 5 Straight Years; Cumulative Dividends of RMB 3.819 Billion

According to the announcement, in the past five years, indicators such as the building materials business’s sales gross margin, average return on net assets, and operating profit per capita have all remained among the leading levels for listed companies in the cement industry. The company stated that this is attributable to the advantages of three major “barriers”: a market-region layout with excellent logistics conditions, sufficient mine resource reserves, and a mixed-ownership mechanism combining high efficiency with standardized and steady operation.

In terms of shareholder returns, since the company’s reorganization and listing in 2013, it has not conducted financing in the capital market. It has already carried out 11 distributions of shareholders’ rights and interests, with cumulative dividends totaling RMB 3.819 billion (including share repurchases). Specifically, in 2024, it distributed cash dividends of RMB 6.30 per 10 shares (including tax), for a total cash distribution of RMB 0.6 billion, accounting for 95.73% of the parent-company net profit of that year.

Equity Investment: RMB 2.065 Billion to Build a Semiconductor Full Industry Chain; 3 Out of 29 Projects Have Already Listed

The company’s equity investments focus on strategic emerging industries such as semiconductors and new materials. Its cumulative investment scale has reached RMB 2.065 billion, covering 29 projects and involving the semiconductor full industry chain of “design-manufacturing-packaging and testing-materials.” As of February 2026, there are 3 projects that have issued and listed, 8 projects that have been accepted for listing, 2 merger and acquisition projects of listed companies, 3 projects filed for tutoring/mentoring, and 4 projects involving repurchase or transfer.

New-Quality Materials Business: Acquired 75% Equity Interest in Meiqi Circuit; Entered the Semiconductor Packaging Substrate Field

On March 16, Shangfeng Cement acquired and increased capital through its controlling subsidiary Shenzhen Zhijin Electronics Co., Ltd. to acquire and hold 75% of the equity interest in Meiqi Circuit (Jiangmen) Co., Ltd., and formally entered the semiconductor packaging substrate business.

Meiqi Circuit’s main business is the manufacturing of IC packaging substrates. Its products are used to connect bare chips with printed circuit boards, and they fulfill functions including signal transmission, chip support, and heat dissipation and protection. This falls under an industry category encouraged by the state. The announcement noted that currently, Meiqi Circuit’s revenue and total assets each account for less than 1% of the company, so the short-term impact is small. However, given that it matches the company’s investment resources in the semiconductor industry chain, in the future it will enhance competitiveness through capital support, channel enablement, and lean management.

Core Responses in the Q&A Session

Why Choose Meiqi Circuit as the Entry Point for the Packaging Substrate Business?

The company said that its partner Shenzhen Zhijin has accumulated 20 years of experience in R&D and manufacturing of packaging substrates, but lacks stable capital investment and an efficient management system. Meiqi Circuit’s technical team and production capacity align with the company’s strategic direction and semiconductor investment resources. The two sides will complement each other’s strengths, promoting high-quality development of the business.

What Is the Target Positioning for the Packaging Substrate Business?

The company stated clearly that the packaging substrate business is positioned as the core of the “new-quality materials growth-type business” among the “three-carriage” model. The goal is to drive the company’s upgrade from a single cement and building materials materials business to a new-quality advanced materials industry, cultivate a second growth curve, break through the “involution-style” competition in mature industries, and achieve high-quality and sustained development.

Future Plan

Shangfeng Cement said it will advance coordinated development of the “three-carriage” model according to the five-year plan: the building materials business will be guided by “quality,” reducing costs and improving efficiency; equity investment will focus on the state’s key emerging industries; and the packaging substrate business will be driven by “speed,” increasing investment, building a professional team, and enhancing scale and competitiveness.

(Data source: Investor Relations Activity Record Form of Gansu Shangfeng Cement Co., Ltd., No. 2026-001)

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