Anhui Conch Cement is the latest H share company to fall victim to the financial crisis with net profit down 59 per cent to 30.21 million yuan (about HK$28.11 million) for the first six months. Chairman Guo Wensan said yesterday that export sales were affected by the crisis and many mainland producers were selling in the domestic market, causing intense competition and price drops. The company's weighted average product price declined 18 per cent, while exports accounted for 3 per cent of sales, down 20 per cent from the previous corresponding period. The gross margin was squeezed to 36 per cent from 46.2 per cent. Mr Guo expects the margin to rise to 39 per cent in the second half. Conch, the mainland's largest cement-maker, saw sales increase 17 per cent to 1.57 million tonnes in the first half, but the increase could not offset the price fall. Mr Guo said cement prices had virtually stabilised in May when the state encouraged larger fixed asset investment to spur economic growth. 'The price would have risen if it was not for the flooding,' he said, adding that the floods had delayed demand for cement as many infrastructure projects had been put on hold. In July and August, its monthly sales were down 18 per cent compared with the months before the flooding. However, Mr Guo said the rebuilding programme and dam reinforcement projects as well as the state's spending spree on infrastructure would stimulate demand. He expects the increase will be reflected in the company's orders in the fourth quarter or early next year. It has orders on hand for six million tonnes - worth about 1.8 billion yuan - and it aims to sell 4.5 million tonnes of cement this year.