Recent developments in the cement industry: the cement index fell 4.78% in the week before the festival. In the 21st year, the cement industry achieved an operating revenue of 1075.4 billion yuan, a year-on-year increase of 7.3%, and a total profit of 169.4 billion yuan, a year-on-year decrease of 10.0%. The week before the festival, the national cement market price was 518 yuan / ton, unchanged month on month, with a year-on-year increase of 74.7 yuan / ton, including 36.4 yuan / ton in East China and 10.8 yuan / ton in Central South China. At the end of January, affected by the long Spring Festival holiday, the demand of China's cement market entered the stage of phased market closure. The shipment volume of enterprises in most regions was only 1-30%, and the cement price was generally stable. After the cement regions filled up the inventory, they successively carried out off peak production or kiln maintenance. Some regions began to stop the decline with the rise, and some regions were ready to raise the price after the festival.
Core view: there is an obvious "restless spring" market in the cement index. In recent 20 years, the Q1 cement index has risen for 13 years, outperforming the Shanghai Composite Index for 16 years, and the average relative return in recent five years is 7%. We believe that the combination of the steady growth policy and the high starting point of prices in early 22 provides favorable support for this round of agitation, and the market can be expected in spring. In the future, the industry will focus on the opportunities brought by the change of the industry supply side under the objectives of "double control" and "double carbon": a) the policy requires that the proportion of benchmark capacity in 2025 will exceed 30%. In the future, the industry's capacity of 2500t / D and below is expected to withdraw one after another, and the total capacity will shrink by more than 8.6%. b) The cement industry is expected to be included in carbon trading in the future. The transformation of carbon tax + emission reduction intensifies the cost pressure of small enterprises, highlights the leading competitive advantage, is expected to further expand through mergers and acquisitions, enhance the voice, and gradually raise the price center. On the demand side, it is expected that the Q1 infrastructure side will make a good start in 22 years, and the bottom of the real estate side will pick up. In the medium and long term, the cement industry as a whole may develop in the trend of "volume reduction and price increase". If carbon trading is included in 22 years, or the concentration of supply side is accelerated, the improvement of leading share is expected to support performance growth. From the perspective of dividend yield and valuation, cement companies have high investment performance price ratio.
From the perspective of growth, it is recommended that [ Huaxin Cement Co.Ltd(600801) ] (the cement price in Southwest China is expected to get out of the depression, and the growth elasticity of overseas cement and aggregate business is high), [ Gansu Shangfeng Cement Co.Ltd(000672) ] (the growth elasticity of cement production capacity is large, and the development of one main and two wings injects new vitality into the company), [ Jiangxi Wannianqing Cement Co.Ltd(000789) ] (Jiangxi cement is the leader, with great regional infrastructure potential, and the current valuation of the company is relatively cheaper), Another recommendation is [ Anhui Conch Cement Company Limited(600585) ] (the national leader with both scale and cost advantages is expected to benefit the most after the implementation of carbon trading).
Risk tip: the demand for cement has fallen sharply, the price rise in peak season is less than expected, and the competition in aggregate industry has intensified.
