20181002-中国银河国际证券-China_Cement_Weekly__More_Cement_Price_Hikes_Expected_after_National_Holiday__Overall_Demand_Largely_Stable_in_Late_September_12页_1mb
报告摘要
China Cement Sector Summary (October 2, 2018)
Core Content
The document provides an analysis of the Chinese cement sector, focusing on price trends, market share distribution, and stock performance as of October 2, 2018. It outlines expectations for future price movements, inventory levels, and valuation metrics for major cement companies.
Main Points
Cement Price Trends
- National Average Cement Price: Increased by 0.2% to RMB 414/tonne from the previous week.
- Regional Price Hikes:
- Prices increased by RMB10-50/tonne in Liaoning, Hebei, Henan, and parts of Hubei.
- Cement prices in Beijing, Tianjin, and Tangshan rose by RMB50/tonne on October 1.
- Cement prices in Henan increased by RMB50/tonne in late September.
- National Holiday Impact: Prices may weaken slightly during the holiday, but overall stability is expected.
- Inventory Levels: National average cement inventory decreased from 54.2% to 53% week on week.
Coal Prices
- Bohai-Rim Steam Coal (Q5500K): The comprehensive average price index remained at RMB569/tonne last week.
- Year-on-Year (YoY): The index decreased by 2.9%.
Stock Performance
- Cement Stocks Under Coverage: Fell by 2% on average last week.
- Best Performer: Conch Cement [0914.HK] dropped by 1.77%.
- Weakest Performer: BBMG [2009.HK] fell by 2.55%.
Key Information
Valuation Table
| Company | Ticker | Rating | Price (HK$) | Market Cap (US$m) | PER (x) 2017 | PER (x) 2018E | PER (x) 2019E | EV/EBITDA (x) 2017 | EV/EBITDA (x) 2018E | EV/EBITDA (x) 2019E | Net Debt/Equity (%) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Conch Cement | 914 HK Equity | BUY | 47.25 | 29,372 | 13.3 | 7.1 | 6.8 | 7.8 | 4.4 | 4.3 | Net Cash |
| ONBM | 3323 HK Equity | BUY | 6.95 | 7,516 | 8.7 | 4.6 | 4.5 | 11.0 | 6.3 | 6.0 | 123 |
| BBMG | 2009 HK Equity | BUY | 2.68 | 5,324 | 8.1 | 5.7 | 5.3 | 10.4 | 7.7 | 7.5 | 82 |
| CR Cement | 1313 HK Equity | BUY | 9.11 | 8,156 | 16.0 | 7.3 | 7.1 | 10.0 | 5.1 | 5.2 | 3 |
| Simple Average | - | - | - | - | 11.5 | 6.2 | 5.9 | 9.8 | 5.9 | 5.7 | 69 |
| Weighted Average | - | - | - | - | 12.5 | 6.6 | 6.4 | 8.9 | 5.2 | 5.0 | 27 |
Peer Comparison Table
| Company | Ticker | Market Cap (US$m) | PER (x) 2017 | PER (x) 2018E | PER (x) 2019E | PBR (x) 2017 | PBR (x) 2018E | PBR (x) 2019E | EV/EBITDA (x) 2017 | EV/EBITDA (x) 2018E | EV/EBITDA (x) 2019E |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Conch Cement | 914 HK Equity | 29,372 | 13.3 | 7.1 | 6.8 | 2.17 | 1.79 | 1.56 | 7.8 | 4.4 | 4.3 |
| ONBM | 3323 HK Equity | 7,516 | 8.7 | 4.6 | 4.5 | 0.66 | 0.63 | 0.56 | 11.0 | 6.3 | 6.0 |
| BBMG | 2009 HK Equity | 5,324 | 8.1 | 5.7 | 5.3 | 0.47 | 0.41 | 0.39 | 10.4 | 7.7 | 7.5 |
| CR Cement | 1313 HK Equity | 8,156 | 16.0 | 7.3 | 7.1 | 2.01 | 1.52 | 1.37 | 10.0 | 5.1 | 5.2 |
| Asia Cement | 743 HK Equity | 1,621 | 7.5 | 6.5 | 6.0 | 1.04 | 0.93 | 0.82 | 6.9 | 4.3 | 4.3 |
| West China Cement | 2233 HK Equity | 1,024 | 6.1 | 4.8 | 4.7 | 0.99 | 0.86 | 0.74 | 5.0 | 3.2 | 3.2 |
| Tianrui Cement | 1252 HK Equity | 2,531 | 15.6 | n.a. | n.a. | 1.76 | n.a. | n.a. | 8.6 | n.a. | n.a. |
| Simple Average | - | - | 10.8 | 6.0 | 5.7 | 1.30 | 1.02 | 0.91 | 8.5 | 5.2 | 5.0 |
| Weighted Average | - | - | 12.4 | 6.3 | 6.0 | 1.70 | 1.34 | 1.18 | 8.8 | 4.9 | 4.9 |
Market Share by Region (2017)
| Region | Anhui Conch | CNBM | CR Cement | Shanshui | BBMG | Asia Cement | WCC | Huaxin-Lafarge |
|---|---|---|---|---|---|---|---|---|
| East China | 46.2% | 35.1% | 10.6% | 49.6% | 2.2% | 0.0% | 0.0% | 0.0% |
| South Central China | 25.7% | 15.4% | 7.1% | 26.6% | 7.0% | 32.9% | 5.3% | 0.0% |
| North China | 0.0% | 5.4% | 2.0% | 3.0% | 12.7% | 0.0% | 94.7% | 0.0% |
| Northeast China | 0.0% | 5.9% | 0.0% | 18.1% | 15.3% | 0.0% | 0.0% | 0.0% |
| Southwest China | 11.7% | 25.1% | 1.6% | 0.0% | 1.5% | 2.0% | 0.3% | 4.8% |
| Northwest China | 7.5% | 26.6% | 0.0% | 0.7% | 6.0% | 0.0% | 8.2% | 0.0% |
Key Views and Insights
- Cement prices are expected to continue rising in several regions due to reduced supply and demand stability.
- The National Holiday may temporarily weaken demand, but it is unlikely to impact overall price stability.
- Inventory levels are declining, which could support price increases.
- Coal prices remain flat, but the YoY trend shows a decrease.
- The valuation metrics show a decline in PER and EV/EBITDA across the board, indicating potential undervaluation or market sentiment changes.
- The equity ratings reflect positive outlooks for most cement companies, with BUY ratings for Conch Cement, ONBM, BBMG, and CR Cement.
- The market share data highlights Conch Cement and CNBM as dominant players in certain regions.
Analysts
- Wong Chi Man – Head of Research
- Mark Lau – Research Analyst
Disclaimer and Disclosure
- The report is not for distribution to individuals or entities in jurisdictions where it would be illegal.
- The report is based on reliable sources but not guaranteed.
- The analyst has no financial interest in the companies discussed, and no trading activity is reported in the 30 days before or after the report's issue date.
- The company may have financial interests in the mentioned companies, and the analyst may have received compensation for investment banking services.
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