20231119-天风证券-水泥行业研究周报_供给收缩推动价格上涨_后期或震荡调整为主_21页_1mb

Cement Industry Research Summary

Recent Market Dynamics

• Recent performance: Cement index rose 163%, prices increased by 4% year-on-year in key regions, driven by supply contraction from winter production cuts and local electricity shortages.
• Regional variations: Price hikes in山东, 河南, 海南, and 云南; price declines in 上海 and 江苏.
• Demand: Soft cement demand, with out-of-stock rates below year-ago levels, particularly in the长三角 region. Supply constraints from reduced production are limiting price declines.

Core Investment View

• Current valuation: Relative low bottom, with limited downside risk due to high cash flows and stable dividends.
• Potential drivers: Urban renewal projects and reconstruction could boost cement demand in 2024, leading to higher prices; cement prices may rebound while demand stabilizes.
• Dividends: Several listed cement companies offer high dividend yields, around 6-7%.

Key Stock Recommendations

• Strong performers: 海螺水泥 (HaiLo Cement) recommended for value due to its scale and resilience.
• Growth-focused: 华新水泥 and 上峰水泥 for higher elasticity.
• Niche Opportunities: 青松建化 in cement; 苏博特 (reducing agent) and �累知集团 for digital transformation and additives.
• Discounted stock performance: Most companies saw revenue and profit declines in 2023Q3, but some like with区位 advantages showed improvement.
• Sector outlook: Likely price consolidation until demand stabilizes later in the year based on expected slow demand growth.

Demand and Supply Updates

• Cement demand: 2023 is projected to decline further but at a slower pace than previous years, with stabilization expected next year.
• Supply: Increased winter production curtailments (e.g., over 140 days in Northern China), with potential industry consolidation due to higher energy efficiency standards. No new production lines reported recently.
• Capacity: Up to 2500-ton/day facilities under review for phasing out to meet stricter carbon goals.

Valuation Assessment

• Current metrics: Most companies operate at low P/E ratios, indicating undervaluation.
• Growth potential: Profitability may improve with rising cement prices, supporting valuation recovery.
• Risk factors: Possible price decline if demand remains weak; high operational costs from carbon compliance.

Upcoming Risks and Opportunities

• Political factors: Demand elasticity could be uneven based on供给 flexibility.
• Economic indicators: If demand recovers beyond expectations, cement prices could exceed projections.
• Market data: Historical P/E-ROE analysis suggests valuation sensitivity to price changes.
• Supply-demand balance: Possible for cement futures outlook as demand stabilizes.