HK Stock Market Move | Huaxin Cement (06655) falls more than 6% in the afternoon, the company says there is uncertainty about whether it can obtain revenue from the construction of the Yaduoxia hydroelectric power station.

Huaxin Cement (06655) fell by more than 6% in the afternoon session, hitting a low of HK$13.6 during trading, a decrease of over 30% from the high of HK$20.1 on Monday. As of the time of writing, it was down 6.21% at HK$13.6, with a trading volume of HK$527 million. On the news front, Huaxin Cement previously issued a notice on abnormal stock price fluctuations, stating that the company has cement, aggregate, and concrete production capacity in the Tibet Autonomous Region of China and is capable of providing construction materials for large infrastructure projects. The uncertainty remains about whether the company can obtain business revenue, amounts, and profitability related to the construction of the Yarlung Tsangpo River downstream hydropower station. It is worth noting that on July 22, Huaxin Cement announced that as of July 21, the company had supplied over 2 million tons of cement for the construction of three completed hydropower stations and one under construction in the Yarlung Tsangpo River Basin, including nearly 1 million tons of medium and low heat special cement. UBS previously released a report stating that based on a 15-year construction period estimate, the first decade of site preparation and main construction phase will heavily consume cement and steel, while the material demand will significantly decrease during the equipment installation and testing phase in the last five years. Referring to the Three Gorges Dam and scaling by 2.7 times the installed capacity, it is estimated that the total cement demand for the project will reach 43 million tons, with an annual average of about 4.3 million tons. The incremental demand only accounts for 0.2% of China's annual production capacity, but will boost cement demand in the Tibet region by about 33%. The bank pointed out that although market sentiment is high, this project is part of long-term planning and has limited substantial impact on the company's profitability.