20170116-中国银河国际证券-China_Cement_Weekly_13页_1mb

报告摘要

China Cement Sector Summary

Core Content

This report provides an analysis of the Chinese cement sector, focusing on price trends, regional integration, and the financial performance of key players. It also includes a comparison of valuation metrics and market share data across different regions.

Main Points

Cement Price Trends

National Cement Price: The average cement price nationwide declined slightly by 0.6% week-on-week to RMB 316.58/tonne.
Regional Price Drop: Prices in parts of Jiangxi and Yunnan fell by RMB 20-30/tonne.
Market Demand: Market demand dropped by 5%-10% week-on-week as the Lunar New Year approached.
Shipment Volume: Shipment volume in South China was better than the previous year, with relatively stable demand in the region. Daily shipment volume reached 80% in most areas.
Inventory Level: The average inventory level nationwide declined slightly to 59.88%.

Coal Price Trends

Bohai Rim Steam Coal (Q5500K): The comprehensive average price index went down RMB 1/tonne to RMB 592/tonne last week.
Year-on-Year Increase: The index was still up 59.6% YoY.

Regional Integration and Performance

BBMG & Jidong Cement: Both companies have shown a turnaround due to strategic industry cooperation in the Beijing-Tianjin-Hebei area.
Profit Increase: BBMG and Jidong Cement reported a 20%-45% YoY increase in net profit, turning from a net loss of RMB 1.7bn in 2015 to a net profit of RMB 20m-80m in 2016.
Gross Profit Margin: Both companies saw an increase in their gross profit margin for cement and clinker sales.
BBMG's Restructuring: BBMG completed the subscription of new registered capital in Jidong Development Group and purchased 10% equity interest, allowing it to control Jidong Development Group and indirectly control Tangshan Jidong Cement Co., Ltd.
Financial Consolidation: BBMG included Jidong Development Group's operating results from October 1, 2016 to December 31, 2016 in its preliminary results estimations.

Key Information

Stock Performance

Cement Stocks: On average, cement stocks under coverage rose 3.2% last week.
Market Sentiment: Market sentiment remained steady, with the Heng Seng Index gradually rising since the start of 2017.
Best Performer: Anhui Conch was the best performer, rising 5.4%.
Weakest Performer: BBMG was the weakest among the coverage stocks, rising only 0.4%.

Valuation Table

Company	Ticker	Rating	Price (HK$)	Market Cap (US$m)	PER (x) 2015	PER (x) 2016E	PER (x) 2017E	EV/EBITDA (x) 2015	EV/EBITDA (x) 2016E	EV/EBITDA (x) 2017E	Net Debt/Equity (%) 2015
Anhui Conch	914 HK Equity	BUY	22.90	14,116	15.2	11.0	9.9	8.1	6.1	5.4	(7)
CNBM	3323 HK Equity	HOLD	4.00	2,769	27.3	11.0	8.6	10.0	10.0	9.5	210
BBMG	2009 HK Equity	BUY	2.77	5,926	12.6	8.6	7.5	9.2	9.1	7.9	54
CR Cement	1313 HK Equity	BUY	3.20	2,680	9.6	11.8	8.8	8.4	6.8	5.9	67

Peer Comparison

Company	Ticker	Rating	Price (LC)	Market Cap (US$m)	PER (x) 2015	PER (x) 2016E	PER (x) 2017E	PBR (x) 2015	PBR (x) 2016E	PBR (x) 2017E	EV/EBITDA (x) 2015	EV/EBITDA (x) 2016E	EV/EBITDA (x) 2017E
Anhui Conch	914 HK Equity	BUY	22.90	14,116	15.2	11.0	9.9	1.32	1.27	1.21	8.1	6.1	5.4
CNBM	3323 HK Equity	HOLD	4	2,769	27.3	11.0	8.6	0.40	0.41	0.41	10.0	10.0	9.5
BBMG	2009 HK Equity	BUY	2.77	5,926	12.6	8.6	7.5	0.62	0.61	0.58	9.2	9.1	7.9
CR Cement	1313 HK Equity	BUY	3.20	2,680	9.6	11.8	8.8	0.74	0.71	0.67	8.4	6.8	5.9
TCC International	1136 HK Equity	NR	1.81	1,147	-	226.3	36.9	0.47	0.46	0.45	9.6	11.2	9.9
China National Materials	1893 HK Equity	NR	1.86	852	9.4	6.8	5.4	0.38	0.37	0.34	5.8	5.3	4.8
Asia Cement	743 HK Equity	NR	1.89	380	-	18.7	10.5	0.29	0.28	0.27	6.9	7.8	7.0
West China Cement	2233 HK Equity	NR	0.92	639	-	68.2	19.5	0.77	0.78	0.75	9.3	7.0	5.5
Tianrui Cement	1252 HK Equity	NR	2.00	616	18.2	n.a.	n.a.	0.56	n.a.	n.a.	8.3	n.a.	n.a.

Market Share in Terms of Clinker Capacity (2016)

Region	Anhui Conch	CNBM	CR Cement	Shanshui	BBMG	TCCI	Asia Cement	WCC	Huaxin-Lafarge	Sinoma Group
East China	44.9%	40.2%	10.9%	51.7%	2.2%	8.7%	25.1%	100%	100%	100%
South Central China	26.5%	15.4%	73.3%	2.6%	3.1%	5.1%	7.9%	100%	100%	100%
North China	8.4%	0.0%	0.0%	2.6%	12.8%	0.0%	94.9%	100%	100%	100%
Northeast China	11.2%	1.4%	5.0%	0.7%	6.5%	1.5%	8.4%	100%	100%	100%
Southwest China	11.2%	1.5%	2.5%	0.3%	1.4%	5.0%	2.0%	100%	3.5%	4.8%
Northwest China	7.5%	3.5%	0.0%	0.0%	5.8%	2.5%	8.4%	100%	3.5%	4.8%
Grand Total	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%	100%	100.0%	100.0%

Disclaimer

This report is not directed at, or intended for distribution to, any person or entity in a jurisdiction where such distribution would be contrary to applicable law.
The report is issued by Galaxy International Securities to institutional clients based on reliable information sources, but no warranty or guarantee is made regarding its accuracy or completeness.
The report is not an offer or invitation to buy or sell any securities and should not be taken as an indication of future performance.
The recipient should understand the investment objectives and related risks and consult an independent financial adviser if necessary.

Disclosure of Interests

China Galaxy Securities (6881.hk) is the holding company of the group under China Galaxy International.
China Galaxy International may have financial interests in the companies discussed, potentially equal to or exceeding 1% of the market capitalization.
One or more directors, officers, and employees of China Galaxy International may be associated with the mentioned companies.
China Galaxy International may participate in financing transactions, provide services, or have other material interests in the securities of the mentioned companies.

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