At a glance
Zhang Zengtao and the board of International Cement Group Ltd, an SGX Mainboard-listed industrial building materials leader operating across Central Asian manufacturing markets
Net profit surged 73% to S$36.7 million on S$219.3 million revenue, alongside a strategic decision to exit a loss-making aluminium business and prioritize early debt repayments
During the first half of 2026 (1H FY2026), comparing the company's financial performance metrics directly against the previous corresponding period from the first half of 2025
Across central production hubs in Kazakhstan and Tajikistan, expanding into Kyrgyzstan via the Korcem plant, under corporate governance oversight on the Singapore Exchange (SGX)
High construction demand and average selling prices created massive operating leverage. A S$6.7 million foreign exchange gain from a stronger Tenge also acted as a non-operating tailwind
Limited cost-of-sales growth to 26% through tight cost discipline. They captured 16.1% of cement revenue via Kyrgyz exports and reinvested cash into defensive efficiency upgrades
A Record-Breaking Half-Year
International Cement Group has delivered a standout performance for 1H2026, characterized by a 73% surge in net profit to S36.7 million. While the 34% top-line growth (S219.3 million) is robust, the higher-signal narrative for institutional investors lies in the Group’s evolving geographic footprint and aggressive margin expansion. As the company transitions from a regional player into a dominant Central Asian industrial leader, its ability to translate volume growth into significant shareholder value through enhanced operational efficiency and strategic market positioning is becoming increasingly evident.
Operating Leverage: Translating 34% Top-Line Growth into a 78% Bottom-Line Surge
The 1H2026 results highlight a classic display of operating leverage. While revenue grew by 34%, the profit attributable to shareholders jumped a staggering 78% to S$26.4 million. Key efficiency metrics underscore this “bottom-line brilliance”: the Group’s EBITDA margin expanded from 29% to 32%, and its Return on Equity (ROE) profile improved to 18%, up from 17% in the previous corresponding period.
Analysis: This disparity between revenue and profit growth suggests International Cement Group is successfully decoupling its cost base from its output. By containing the cost of sales growth to 26% against a 34% revenue increase, the Group is demonstrating superior cost discipline and the benefit of higher average selling prices (ASPs). However, a rigorous analysis of the “quality of earnings” must acknowledge a S$6.7 million net foreign exchange gain—primarily driven by the Tenge’s appreciation against the USD and CNY—which acted as a significant non-operating tailwind.
“We are delighted to see our performance momentum continued to strengthen in 1H2026, marked by strong revenue growth, enhanced profitability and resilient contributions from our Kazakhstan and Tajikistan operations,” stated CEO Zhang Zengtao. “As infrastructure and urban development continue to advance across Central Asia, we are well placed to pursue new growth opportunities and further build long-term value for shareholders.”
Kyrgyzstan and Gypsum: Diversification Beyond the Kazakh Core
While Kazakhstan and Tajikistan remain the Group’s pillars, 1H2026 saw the emergence of Kyrgyzstan as a formidable third growth engine. Exports from the new Korcem plant to Kyrgyzstan now account for 16.1% of cement revenue, totaling S$34.6 million.
Analysis: This geographic pivot is a vital strategic hedge. By capitalizing on the “construction boom” in Bishkek and the Chui region—fueled by state-backed housing programs—International Cement Group is reducing its reliance on the domestic Kazakh market. Furthermore, the Group is successfully cultivating a secondary diversification pillar in its “Others” segment (Gypsum), which grew from S3.87 million to S4.94 million YoY. This focus on higher-margin products like self-levelling compounds and putty powder is further insulating the ROE profile from pure commodity price volatility.
Visualizing the Regional Revenue Mix
The following table details the revenue distribution from continuing operations, highlighting the rapid scaling of new territories.
| Market | 1H2026 Revenue (S$’000) | 1H2025 Revenue (S$’000) | YoY Change (%) |
| Kazakhstan | 98,806 | 88,801 | +11.3% |
| Tajikistan | 79,014 | 68,199 | +15.9% |
| Kyrgyzstan | 34,555 | – | n/m* |
| Afghanistan | 6,931 | 6,711 | +3.3% |
| Total Continuing Ops | 219,306 | 163,711 | +33.9% |
| *Kyrgyzstan was a new market starting 2H2025. |
Margin Expansion through “Defensive Investments”
Gross profit margin advanced from 36% to 40% in 1H2026, a result of strong regional demand and pricing power. International Cement Group is currently executing a “Defensive Investments” strategy to protect this moat before new supply hits the market.
Analysis: Management is moving aggressively to pre-empt competition. Capital expenditure is being funneled into auxiliary facilities in Kazakhstan and Tajikistan to optimize cost structures. Notably, the Group committed S$14.1 million for an additional 12.5% stake in Sharcem LLP to consolidate its hold on the East Kazakhstan market. These efficiency plays are designed to ensure International Cement Group remains the lowest-cost producer, providing a buffer against the pricing pressure typical of a maturing industrial cycle.
Strategic Exit from the Aluminium Business
The Board is proceeding with the planned disposal of its loss-making aluminium segment (Compact Metal Industries and Integrate Private Limited).
Analysis: This is a prudent “house-cleaning” move. The segment contributed a negligible 0.5% to 1H2026 revenue but was a persistent drag on management focus and profitability. By exiting this non-core business, International Cement Group is transforming into a pure-play Central Asian building materials leader, which should support a valuation re-rating.
“As we continue to streamline the Group through the planned disposal of our discontinued aluminium business, we are well positioned to deliver sustainable long-term value for shareholders,” CEO Zhang Zengtao noted.
The Cash Flow Paradox: Payouts vs. Paydowns
Despite generating a robust S78.9 million in operating cash flow and holding S48.6 million in cash equivalents, International Cement Group did not declare a dividend. Instead, management is prioritizing Free Cash Flow (FCF) for balance sheet de-risking.
Analysis: The Group made S6.5 million in early loan repayments to major shareholders in 1H2026. This is a critical risk-management move given that USD and CNY denominated liabilities (US93.5 million and CNY 85.3 million, respectively) represent approximately 40% of the Group’s shareholders’ funds. In a region where local currencies lack cost-effective hedging instruments, paring down foreign currency debt is a necessary safeguard against future FX headwinds.
Investor Outlook: Growth with a Side of Caution
International Cement Group’s investment thesis remains tethered to its status as the largest dry process cement producer in Kazakhstan, with a total annual capacity of 3.7 million metric tonnes. However, the medium-term outlook requires a balanced perspective.
The Upside:
- Infrastructure Multipliers: Projects like the Alatau Special Economic Zone and continued 13.4% growth in Kazakh construction volume provide a high floor for demand.
- Direct-to-Customer Shift: Moving toward direct sales to large construction firms in the drywall segment is enhancing margin capture.
The Risks:
- Imminent Supply Glut: The “new phase of capacity expansion” is high-stakes. Tajikistan alone has announced four new plants with a combined capacity of 6.0 million metric tonnes by 2029. This represents a significant threat to regional utilization rates and pricing.
- Liability Mismatch: While 1H2026 benefited from Tenge appreciation, any reversal would spike the carrying value of the Group’s US$93.5 million in foreign debt.
If International Cement Group can maintain its cost leadership and successfully deploy its “defensive” capital before the 2029 capacity wave, it remains the most compelling vehicle for exposure to the Central Asian construction super-cycle.
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