20160329-中国银河国际证券-China_Cement_Weekly_Stronger_Recovery_in_Cement_Prices_in_East_and_South_China__More_Measures_to_Cool_Down_Property_Market_12页_1mb

China Cement Weekly Summary - March 29, 2016

Core Content

The China Cement Weekly report for March 29, 2016, provides an overview of the cement market performance and highlights key developments in the sector, including price recovery, regional shipment trends, and policy impacts on the property market.

Main Points

Cement Price Recovery

• The national average cement price increased by 1.18% week-on-week to RMB 242.25/tonne.
• East China and South China saw stronger price recovery, with increases of RMB10-30/tonne.
• Southwest China also experienced price increases, while northwest and northeast China showed weak demand.
• Shipment volumes in east and south central China returned to 80%-90% of normal levels, excluding rainy weather.
• In northwest and northeast China, shipment volumes were only at 40%-60% of the normal level.
• Beijing, Baoding, Langfang, and Zhangjiakou in the north showed relatively strong performance due to ongoing key projects.

Coal Prices

• Bohai-Rim Steam Coal (Q5500K) prices stabilized at RMB 389/tonne.
• The index was 17.8% lower on a year-on-year (YoY) basis.

Property Market Policies

• New property cooling policies were introduced in Shenzhen, Ningbo, and Shanghai to address the overheated market.
• The report suggests that the focus should shift from the property market to the cement market's demand and supply balance.
• BBMG (2009.HK) saw a >30% increase in sales volume from a low base in 2015, driven by new infrastructure projects, but prices dropped slightly compared to Q4 2015.
• Companies in areas with balanced market demand and supply, such as Anhui Conch (914.HK) and CR Cement (1313.HK), are expected to benefit if price recovery continues in Q2 and H2.

Stock Performance

• Cement stocks under coverage declined on average by 2.9% last week.
• BBMG (2009.HK) was the best performer, up 2.6%, due to favorable property policies.
• CR Cement (1313.HK) was the weakest, down 5.7%.

Key Information

Valuation Table Highlights

EPS Growth and PEG

Market Share in Clinker Capacity (2015)

• East China:

  • Anhui Conch (0914.HK): 17.7%
  • CNBM (3323.HK): 25.4%
  • CR Cement (1313.HK): 1.4%
  • Shanshui (0691.HK): 6.2%
  • BBMG (2009.HK): 0.8%
  • TCCI (1136.HK): 1.8%
  • Asia Cement (0743.HK): 0.0%
  • WCC (2233.HK): 0.0%
  • Sinoma Group: 3.0%
  • Jidong: 0.4%
  • Huaxin: 0.0%

• South Central China:

  • Guangdong: 12.1%
  • Guangxi: 10.6%
  • Hainan: 10.1%
  • Hunan: 0.4%
  • Hubei: 0.4%
  • Henan: 5.2%

• North China:

  • Beijing: 0.0%
  • Tianjin: 0.0%
  • Hebei: 0.0%
  • Shanxi: 0.0%
  • Inner Mongolia: 0.0%

• Northeast China:

  • Heilongjiang: 0.0%
  • Jilin: 0.0%
  • Liaoning: 0.0%

• Southwest China:

  • Chongqing: 11.2%
  • Sichuan: 18.0%
  • Guizhou: 0.0%
  • Yunnan: 0.0%
  • Tibet: 0.0%

Figures and Data Sources

• Figure 1: Regional Cement Price
• Figure 2: Cement Prices in Major Cities (1)
• Figure 3: Cement Prices in Major Cities (2)
• Figure 4: Cement Prices in Major Cities (3)
• Figure 5: Cement Prices in Major Cities (4)
• Figure 6: Cement Prices (Late-March) (RMB/Tonne)
• Figure 7: Cement Inventory Level (%)
• Figure 8: Clinker Capacity Breakdown by Region (2015)
• Figure 9: Market Share in Terms of Clinker Capacity (2015)

Sources

• Company data
• Bloomberg
• CGIS Research
• Digital Cement
• China Cement Association
• Wind Info
• Capital IQ