20180619-中国银河国际证券-China_Cement_Weekly__Cement_Production_Grew_1.9__YoY_in_May__Property_Investment_Remained_Resilient__12页_756kb

报告摘要

China Cement Weekly Summary - June 19, 2018

Core Content Overview

This report provides an analysis of the cement sector in China, focusing on production trends, regional price movements, and valuation metrics for key companies. It also includes insights into the broader economic context, such as property and fixed asset investment growth, and outlines the analyst's ratings and recommendations.

Key Market Trends

Cement Production:
- Cement production in May 2018 increased by 1.9% YoY to 215 million tonnes.
- Production volume for the first five months of 2018 decreased by 0.8% YoY to 799 million tonnes.
- The weakness in Q1 was attributed to the extended National People's Congress meeting.
Fixed Asset Investment:
- Fixed asset investment growth for 5M2018 was 6.1% YoY, a 0.9ppt decrease compared to 4M2018.
- Property investment growth remained stable at 10.2% YoY, largely similar to the previous month.
Cement Prices:
- The national average cement price declined slightly by 0.24% to RMB415/tonne.
- Price increases were observed in Henan, northern Anhui, and Ningxia (RMB20-30/tonne).
- Price declines were noted in Jilin, Fujian, Hunan, and Guizhou (RMB10-30/tonne).
- Prices are expected to decline moderately with the arrival of rainy weather.
Inventory Levels:
- National average inventory remained at 55%.
- Low inventory levels contributed to the resilience of cement prices despite reduced shipment volumes.

Company Performance and Valuation

Company	Ticker	Rating	Price (HK$)	Market Cap (US$m)	PER (2017)	PER (2018E)	PER (2019E)	PBR (2017)	PBR (2018E)	PBR (2019E)	EV/EBITDA (2018E)	EV/EBITDA (2019E)	Net Debt/Equity (%)
Conch Cement	914 HK Equity	BUY	49.60	31,514	15.4	9.8	9.8	2.50	2.08	1.87	8.7	5.9	Net cash
CNBM	3323 HK Equity	BUY	9.50	7,781	12.7	7.4	7.3	0.96	0.85	0.77	9.2	7.5	169
BBMG	2009 HK Equity	BUY	3.15	5,598	11.2	7.7	7.2	0.58	0.52	0.49	11.2	9.1	95
CR Cement	1313 HK Equity	HOLD	8.77	7,345	16.1	7.3	7.3	1.89	1.63	1.46	9.5	5.3	16
Simple Average	-	-	-	-	13.8	8.1	7.9	1.48	1.27	1.15	9.6	7.0	93
Weighted Average	-	-	-	-	14.6	8.9	8.8	1.98	1.67	1.50	9.2	6.4	37

EPS Growth and PEG

Company	Ticker	EPS Growth (2018E)	EPS Growth (2019E)	CAGR (2017-2019E)	PEG (2018E)	PEG (2017)	PEG (2019E)
Conch Cement	914 HK Equity	54.0%	0.5%	24.4%	0.4	17.49	20.12
CNBM	3323 HK Equity	69.3%	1.2%	30.9%	0.2	7.86	12.10
CR Cement	1313 HK Equity	118.7%	0.5%	48.2%	0.2	12.67	27.70
BBMG	2009 HK Equity	44.2%	7.1%	24.2%	0.3	5.32	6.93
Simple Average	-	71.5%	2.3%	31.9%	0.3	10.83	17.42
Weighted Average	-	64.3%	1.3%	28.7%	0.3	14.07	20.28

Dividend Yield

Company	Ticker	Dividend Yield (2017)	Dividend Yield (2018E)	Dividend Yield (2019E)
Conch Cement	914 HK Equity	2.9%	4.6%	5.1%
CNBM	3323 HK Equity	1.2%	2.7%	2.7%
CR Cement	1313 HK Equity	3.1%	6.9%	6.8%
BBMG	2009 HK Equity	2.1%	2.8%	3.0%
Simple Average	-	2.3%	4.2%	4.4%
Weighted Average	-	2.6%	4.4%	4.8%

Regional Cement Price Analysis

Regional Price Variations:
- Henan, northern Anhui, and Ningxia saw price increases.
- Jilin, Fujian, Hunan, and Guizhou experienced price declines.
- Figure 1 highlights regional cement price changes.
Cement Price Trends in Major Cities:
- Figure 2, 3, 4, and 5 illustrate cement price trends across various cities in different regions of China.
- The national average price is RMB415/tonne, with expected moderate declines due to upcoming rainy weather.

Regional Clinker Capacity Breakdown (2017)

Region	Anhui Conch	CNBM	CR Cement	Shanshui	BBMG	Asia Cement	WCC	Huaxin-Lafarge	Sinoma Group
East China	46.2%	41.3%	10.6%	49.6%	2.2%	0.0%	0.0%	0.0%	14.6%
South Central China	25.7%	16.0%	74.1%	2.7%	3.1%	58.5%	0.0%	0.0%	2.4%
North China	0.0%	5.4%	7.1%	26.6%	6.6%	0.0%	0.0%	0.0%	0.0%
Northeast China	0.0%	7.6%	0.0%	18.1%	30.4%	0.0%	0.0%	0.0%	1.9%
Southwest China	11.1%	16.0%	3.6%	2.9%	5.6%	0.9%	1.0%	2.8%	4.7%
Northwest China	7.5%	0.0%	0.0%	0.7%	6.0%	0.0%	8.2%	0.0%	26.6%

Market Share by Region (2017)

Region	Anhui Conch	CNBM	CR Cement	Shanshui	BBMG	Asia Cement	WCC	Huaxin-Lafarge	Sinoma Group
East China	20.0%	16.0%	3.6%	2.9%	5.6%	0.9%	1.0%	2.8%	4.7%
South Central China	11.6%	10.3%	10.9%	0.3%	0.7%	2.2%	0.0%	7.8%	2.4%
North China	0.0%	6.7%	2.0%	5.8%	30.4%	0.0%	0.0%	0.0%	1.9%
Northeast China	0.0%	22.3%	0.0%	9.4%	6.7%	0.0%	0.0%	0.0%	0.0%
Southwest China	11.7%	16.0%	3.6%	2.9%	5.6%	0.9%	1.0%	2.8%	4.7%
Northwest China	7.5%	0.0%	0.0%	0.7%	6.0%	0.0%	8.2%	0.0%	26.6%

Analyst Notes

Analyst: Wong Chi Man (Head of Research), Mark Lau (Research Analyst)
Contact Information:
- Wong Chi Man: (852) 3698-6317, cmwong@chinastock.com.hk
- Mark Lau: (852) 3698-6393, marklau@chinastock.com.hk

Disclaimer

This report is not directed at any person or entity in jurisdictions where distribution or use would be unlawful.
No warranties or guarantees are made regarding the accuracy or completeness of the information.
Past performance is not indicative of future results.
Recipients should consult their own financial advisers before making investment decisions.

Disclosure of Interests

China Galaxy International may have financial interests in the companies mentioned.
The company may have participated in financing transactions, provided investment services, or held positions in the securities of the companies covered in the report.

Analyst Certification

The analyst certifies that the views expressed accurately reflect their personal opinions.
No part of their compensation is directly or indirectly related to the specific views in the report.
The analyst and their associates have not traded in the covered securities within 30 days prior to the report's publication and will not do so within three business days after publication.

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