20160606-中国银河国际证券-China_Cement_Weekly_Coal_Prices_Began_to_Pick_Up_but_the_Overall_Cost_Impact_is_Managea-ble_at_the_Moment_12页_1mb

报告摘要

China Cement Sector Summary

Core Content

The China cement sector is currently experiencing a mixed trend in price movements and market sentiment, with coal prices also showing an upward trend. The overall cost impact from coal price increases is deemed manageable for the cement industry at this moment. Regional variations in cement prices and demand are notable, with some areas seeing price hikes and others experiencing declines. Inventory levels have slightly increased nationwide.

Main Points

Cement Price Trends: Cement prices continued to rise last week, with an average recovery of 1.43% week-on-week to RMB258.83/tonne. Prices in the northeast, north, and parts of southern China increased by RMB10-40/tonne, while prices in parts of the east and central China declined by up to RMB10-15/tonne.
Demand and Shipments: Daily cement shipments in the southern regions weakened at the end of May due to rainfall, while demand in northern China recovered, with daily shipment volumes increasing by 10%-30%. The coordinated price hikes by major players have contributed to the continued price increase.
Coal Price Impact: Coal prices began to rise again after three months of stabilization, increasing by RMB1/tonne to RMB390/tonne. The China Coal Association has announced a coordinated price hike of RMB10/tonne for June, which would represent a 2.6% increase. Since coal accounts for about 30% of the total production cost, the impact is considered manageable, although potential concerns arise if coal prices continue to rise while cement prices are capped due to the rainy season.
Market Sentiment: Cement stocks under coverage declined on average by 1.12% last week. The best performer was CR Cement, which rose by 0.39%, while CNBM was the weakest, down by 3.07%.

Key Information

Price Hikes: BBMG and Jidong Cement announced a RMB30-50/tonne price hike, with medium-sized producers in the region following suit with a RMB20-30/tonne adjustment.
Inventory Levels: The average inventory levels nationwide increased slightly to 69.31%.
Valuation Metrics:
- PER (x): Anhui Conch had a PER of 13.1 in 2015, decreasing to 9.4 in 2016E and 9.4 in 2017E.
- PBR (x): Anhui Conch had a PBR of 1.20 in 2015, decreasing to 1.09 in 2016E and 1.01 in 2017E.
- EV/EBITDA (x): Anhui Conch had an EV/EBITDA of 7.0 in 2015, decreasing to 5.4 in 2016E and 5.1 in 2017E.
- EPS Growth (%): Anhui Conch had an EPS growth of 46.2 in 2016E and 5.2 in 2017E.
- ROE (%): Anhui Conch had an ROE of 8.93 in 2015, decreasing to 12.09 in 2016E and increasing to 11.66 in 2017E.
- Dividend Yield (%): Anhui Conch had a dividend yield of 2.9 in 2015 and 3.2 in 2016E.
Peer Comparison:
- Market Cap (US$m): Anhui Conch had a market cap of 12,168 in 2015, while CNBM had a market cap of 2,402.
- PER (x): Anhui Conch had a PER of 13.1 in 2015, while BBMG had a PER of 11.4 in 2016E and 7.2 in 2017E.
- PBR (x): Anhui Conch had a PBR of 1.20 in 2015, while BBMG had a PBR of 0.56 in 2015 and 0.52 in 2017E.
- EV/EBITDA (x): Anhui Conch had an EV/EBITDA of 7.0 in 2015, while BBMG had an EV/EBITDA of 8.6 in 2016E and 6.8 in 2017E.

Regional Cement Prices

East China: Prices declined in some areas, but demand in northern regions showed recovery.
South Central China: Prices varied, with some areas seeing increases and others declines.
North China: Prices increased, and demand recovered significantly.
Northeast China: Prices increased in some areas, but overall market sentiment was weak.
Southwest China: Prices showed mixed trends, with some areas experiencing increases and others declines.

Regional Clinker Capacity Breakdown (2015)

East China: Anhui Conch had the largest regional exposure at 53.0%, followed by CNBM at 25.4%.
South Central China: Guangxi had the largest exposure at 22.0%, followed by Hunan at 26.4%.
North China: Hebei had the largest exposure at 64.4%, followed by Shanxi at 11.6%.
Northeast China: Liaoning had the largest exposure at 5.6%, followed by Jilin at 2.1%.

Market Share in Terms of Clinker Capacity (2015)

East China: Anhui Conch held the largest market share with 17.7%, followed by CNBM with 25.4%.
South Central China: Guangdong had the largest market share at 16.2%, followed by Hunan at 26.4%.
North China: Hebei had the largest market share at 1.3%, followed by Shandong at 35.4%.
Northeast China: Liaoning had the largest market share at 5.1%, followed by Jilin at 2.1%.