Fitch upgrades Anhui Conch

Fitch Ratings said it upgraded Anhui Conch Cement Co. Ltd.'s long-term issuer default rating and senior unsecured rating to A from A-.

The outlook is stable.

The upgrades reflect the structural improvement in the Chinese cement market following supply-side reforms, which solidifies Conch's exceptionally strong business and financial profiles, Fitch said.

Conch's market leadership and cost advantage – driven by 100% self-sufficiency in raw materials, large production facilities and access to waterborne transport – resulted in sustained high margins through different price environments, the agency explained.

Also, the company has exceptionally conservative financial policies on acquisitions and dividend payout, Fitch said.

This means the company will continue to generate high free cash flows even if cement prices retreat from current highs, the agency said.

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