20150929-中国银河国际证券-Cement_Prices_Rebound_Accelerated_in_East,_Central_and_South_China__Shangfeng_Cement_Expanded_its_Presence_in_Xinjiang_12页_1mb

报告摘要

China Cement Sector Summary

Core Content

The document provides an overview of the current state and recent developments in the Chinese cement industry, focusing on price trends, inventory levels, and key company activities. It also includes a valuation analysis of major cement stocks and a breakdown of regional market share.

Key Market Trends

Cement Prices: Cement prices rebounded last week, with an average increase of 0.62% nationwide to RMB255.67/tonne.
Regional Performance:
- Prices rose in East, Central, and South China, driven by improving downstream demand, declining inventories, and industry self-discipline.
- Prices in Shanghai, Jiangsu, Zhejiang, and Guangxi increased by RMB10~30/tonne.
- The document forecasts that prices in regions with strong demand may continue to rise in mid-October.
Inventory Levels: The national average cement inventory level dropped to 73.39% last week, indicating a tightening market.

Coal Price Trends

Coal Prices: The Bohai-Rim Steam Coal (Q5500K) price fell below RMB400/tonne, dropping RMB2/tonne to RMB398/tonne.
Year-on-Year Decline: The price index was 17% lower compared to the same period last year.

M&A Activity

Shangfeng Cement Acquisition: Shangfeng Cement, based in Gansu, proposed to acquire a 70% stake in Zhongbo Cement in Xinjiang for RMB62.9m.
Valuation: The deal is estimated to be equivalent to an EV/tonne of RMB300-400.
Strategic Rationale: The acquisition is intended to capitalize on the "One Belt, One Road" policy.
Valuation Insight: The transaction highlights the low valuations of second-tier players such as Asia Cement (0.31x PBR) and TCCI (0.33x PBR), though it may not be representative due to its small size.
Investor Suitability: It may be more suitable for long-term investors due to the unexciting short-term results from low cement prices.

Stock Performance

Cement Stocks: On average, cement stocks dropped 4.69% last week.
Market Sentiment: The market sentiment turned weak after a two-week mild rebound.
Best Performer: CNBM (3323.HK) dropped 3.91% to HK$4.67, with a BUY rating.
Weakest Performer: CR Cement (1313.HK) declined 5.24%, also with a BUY rating.

Valuation Table

Company	Ticker	Rating	Price (HK$)	Market Cap (US$m)	PER (2014)	PER (2015E)	PER (2016E)	PBR (2014)	PBR (2015E)	PBR (2016E)	EV/EBITDA (2014)	EV/EBITDA (2015E)	EV/EBITDA (2016E)	Net Debt/Equity (%)
Anhui Conch	914 HK Equity	BUY	23.75	15,053	9.0	12.7	12.1	1.58	1.44	1.33	5.9	7.1	6.4	6
CNBM	3323 HK Equity	BUY	4.67	3,232	3.6	8.7	5.0	0.51	0.48	0.44	7.5	9.4	8.6	239
BBMG	2009 HK Equity	BUY	5.49	5,291	10.7	10.8	7.5	0.66	0.66	0.62	8.6	8.6	6.8	65
CR Cement	1313 HK Equity	BUY	3.62	3,032	5.5	7.4	7.2	0.84	0.78	0.72	5.1	6.6	5.1	51
Shanshui Cement	691 HK Equity	SELL	6.29	2,725	45.9	42.2	34.7	1.58	1.52	1.47	10.6	10.3	9.4	134

Peer Comparison

Company	Ticker	Market Cap (US$m)	PER (2014)	PER (2015E)	PER (2016E)	PBR (2014)	PBR (2015E)	PBR (2016E)	EV/EBITDA (2014)	EV/EBITDA (2015E)	EV/EBITDA (2016E)
Anhui Conch	914 HK Equity	15,053	9.0	12.7	12.1	1.58	1.44	1.33	5.9	7.1	6.4
CNBM	3323 HK Equity	3,232	3.6	8.7	5.0	0.51	0.48	0.44	7.5	9.4	8.6
BBMG	2009 HK Equity	5,291	10.7	10.8	7.5	0.66	0.66	0.62	8.6	8.6	6.8
CR Cement	1313 HK Equity	3,032	5.5	7.4	7.2	0.84	0.78	0.72	5.1	6.6	5.1
Shanshui Cement	691 HK Equity	2,725	45.9	42.2	34.7	1.58	1.52	1.47	10.6	10.3	9.4
TCC International	1136 HK Equity	951	5.1	14.6	9.2	0.41	0.34	0.33	4.1	9.4	7.0
China National Materials	1893 HK Equity	884	9.7	10.2	9.2	0.38	0.40	0.37	6.4	7.0	6.4
Asia Cement	743 HK Equity	456	7.0	6.7	4.9	0.30	0.31	0.30	4.3	7.5	6.4
West China Cement	2233 HK Equity	806	-	28.0	10.7	0.84	0.76	0.75	6.5	7.0	6.5
Tianrui Cement	1252 HK Equity	557	7.4	n.a.	n.a.	0.50	n.a.	n.a.	6.8	n.a.	n.a.

Regional Cement Price Breakdown

East China: Prices showed a positive trend, with some areas seeing increases of RMB10~30/tonne.
Central and South China: These regions also performed well, with improving demand and lower inventories contributing to price growth.
Xinjiang: Shangfeng Cement's acquisition of Zhongbo Cement is a key development in this region.

Market Share by Region (2014)

East China:
- Anhui Conch: 46.6%
- CNBM: 25.7%
- CR Cement: 11.9%
- Shanshui: 53.7%
- BBMG: 8.7%
- TCCI: 1.8%
- Asia Cement: 0.0%
- WCC: 0.0%
- Sinoma Group: 0.4%
- Jidong: 0.0%
- Huaxin: 0.0%
South Central China:
- Guangdong: 11.6%
- Guangxi: 11.0%
- Hainan: 23.3%
- Hunan: 10.5%
- Hubei: 0.4%
- Henan: 1.6%
North China:
- Beijing: 0.0%
- Tianjin: 100.0%
- Hebei: 22.1%
- Shanxi: 14.3%
- Inner Mongolia: 8.0%
Northeast China:
- Heilongjiang: 57.5%
- Jilin: 8.5%
- Liaoning: 14.4%
Southwest China:
- Chongqing: 20.4%
- Sichuan: 36.6%
- Guizhou: 26.6%
- Yunnan: 21.4%
- Tibet: 27.3%
Northwest China:
- Gansu: 14.2%
- Shaanxi: 17.1%
- Qinghai: 0.0%
- Ningxia: 0.0%
- Xinjiang: 32.8%

Summary

Cement Prices: Showed a rebound in East, Central, and South China, with declining inventories and improved demand.
Coal Prices: Dipped below RMB400/tonne, reflecting lower costs.
M&A Activity: Shangfeng Cement's acquisition of Zhongbo Cement highlights the strategic importance of the "One Belt, One Road" policy and low valuations of smaller firms.
Stock Performance: Cement stocks experienced declines, with CNBM and CR Cement being the best and worst performers respectively.
Valuation Insights: The valuation table and peer comparison illustrate divergent performance and valuation levels, with some companies showing lower PBR and EV/EBITDA multiples.

Conclusion

The cement sector in China is showing mixed performance, with price increases in certain regions and declines in others. The acquisition activity and market sentiment suggest opportunities and challenges for investors. Long-term investment may be more suitable for companies with lower valuations and limited short-term profitability.

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