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Steppe Cement‘s (LSE: STCM) one of the hottest names in the penny stock arena at the moment. In the space of a month, it has surged from 25.5p to around 40p – a gain of more than 50%.
Could a small investment here be worth considering? Let’s take a look at what’s going on.
Who’s Steppe Cement?
Steppe’s a cement company which operates in Kazakhstan via a Malaysia-based holding company. It was listed on the London Stock Exchange (AIM) back in 2005.
The company has been operating since the 1950s, so it has been around a while. This year, it’s expecting to produce about 2m tonnes of cement.
Why are the shares so hot?
The main reason the shares are flying at the moment is that H1 FY26 results, posted on 9 September, were strong. For the period, the company sold 978,950 tonnes of cement versus 850,424 tonnes in the prior-year period.
Consolidated turnover for the period was KZT29,588m (US$61.1m) compared with KZT20,717m ($40.9m) in H1 2025. Meanwhile, profit after tax was $9m, compared with a loss of $0.5m in H1 2025.
Is the penny stock worth a look?
I see Steppe Cement as quite a risky investment. It’s certainly not a stock I’d load up on. Not only are its operations concentrated in Kazakhstan but its success is dependent on the construction market, which is cyclical.
Additionally, we’re talking about a very small company (market-cap of around £89m) with a convoluted corporate structure, so share price volatility’s likely to be high, and trading spreads could be wide.
That said, it definitely has some attractions beyond the recent operational momentum. For a start, the company’s expanding cement production to a total capacity of 2.5m tonnes to enable it to meet increasing demand – this should result in higher sales over time (it’s hoping to commission its new production site in summer 2027).
Second, it’s seeing market share gains. In H1, its Kazakhstan cement market share reached around 15%, an increase of 2% from the prior year.
Third, the valuation’s relatively low. If the company was able to replicate its H1 performance – when earnings per share were 4.1 cents or 3.1p – in H2, we could be looking at a price-to-earnings (P/E) ratio of just six.
Finally, the company’ paying dividends. For H1, it announced a 2p per share dividend which equates to a yield of around 5%. Note that if it announces a final dividend for H2, the yield could be far higher than this.
My take
Overall, I see Steppe Cement shares as a high-risk/high-risk proposition. They’re speculative in nature however, a small investment could be worth considering given the operational momentum, low valuation, and dividends.
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Edward Sheldon owns shares in London Stock Exchange Group.
This story originally appeared on Motley Fool
