Results Review
　　1Q19 results beat our expectation
　　1Q19 revenue rose 61.1% YoY to Rmb16.01bn, and attributable netprofit grew Rmb635mn YoY to Rmb422mn or Rmb0.04/sh, slightabove our expectation thanks to upside surprise in real estateearnings.
　　In 1Q19, sales volume of cement and clinkers rose 33% YoY or 3.5mntonnes to 14.15mn tonnes, and we estimate average sales prices roseRmb33 to Rmb313/t. Gross profit may have increased Rmb20 toRmb102/t. Net gearing ratio rose to 178% （+20ppt YoY and +10pptQoQ） due to YoY and QoQ increase in interest-bearing liabilities.
　　Gearing ratio stayed flat YoY at 71%. Operating cash flow fellRmb440mn YoY to -Rmb4.21bn due to sharp YoY increase in inventoryand decline in advances received.
　　Trends to watch
　　Earnings of cement business to maintain strong growth in 2Q19.
　　Average price of high-grade cement in Beijing, Tianjin and Hebei hasrisen Rm50 compared with 2Q18 to Rmb480/t. As previous pricehikes are implemented, we expect sales prices and gross profit pertonne to continue improving in the region.
　　Profit contribution from real estate business may decline in thefollowing quarters. 1Q19 real estate net profit sharply grew YoY, butBBMG expects that full-year revenue may just grow 6% YoY toRmb23.5bn with gross margin at 27% and full-year gross profit down10% YoY to Rmb6.35bn. Therefore, we expect the real estatebusiness’s profit contribution to drop YoY in the following quarters.
　　Earnings forecast
　　We maintain 2019 and 2020 EPS forecast at Rmb0.35 and Rmb0.35.
　　Valuation and recommendation
　　BBMG-A is trading at 0.7x 2019e and 0.7x 2020e P/B, and BBMG-H at0.4x 2019e and 0.4x 2020e P/B. Maintain BUY and TP at Rmb5.6 （1.0x2019e and 0.9x 2020e P/B; 38% upside） and HK$4.2 （0.7x 2019e and0.6x 2020e P/B; 52% upside）。
　　Risks
　　Disappointing demand from construction projects.