Recent developments in the cement industry: the cement index rose 10.63% last week, and the first week after the festival ushered in a good start. We believe that the social finance data in January is higher than expected or will become the catalyst for the 22-year index to open the upward channel. If the subsequent data (project operating rate, investment data, etc.) further confirms the good demand, it will be good for the sector. Last week, the national cement market price was 516 yuan / ton, with a month on month decrease of 1.9 yuan / ton and a year-on-year increase of 74.2 yuan / ton. The price reduction areas were mainly Jiangxi, Sichuan and Zhanjiang, Guangdong, with a range of 20 yuan / ton; The price of cement clinker along the Yangtze River Delta will be increased by 30 yuan / ton. In the first week after the Spring Festival, China’s cement market demand is affected by off-season factors and continuous rain and snow weather. The market demand has not been started and is basically at a standstill. There is only a small amount of demand for bagged goods. The vast majority of cement enterprises are carrying out off peak production and shutdown maintenance. It is expected that after the 15th day of the first month, with the resumption of construction projects and mixing plants, the demand for cement will gradually start.
Core view: from the beginning of the past decade to the end of the peak season (5.30), the average value of the maximum increase of the cement index is 35.3%, the lowest in 21 years is 14.5%, and the maximum increase of the cement index since the beginning of the year is only 9.2%. We believe that the current policy environment is more favorable than that in 21 years, and there is still room for subsequent rise, which needs further catalysis from the demand side. In 2025, the proportion of the total capacity of the cement industry that has entered the “double pole control” period and the “double pole control” period is expected to exceed the “double pole control” policy, and the proportion of the total capacity of the cement industry is expected to be reduced by more than 2500t / D in the future. It is expected to focus on the “double pole control” period, and the “double pole control” period will bring more than 30% of the total capacity of the industry in 2025. 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. The demand side expects that the infrastructure side is expected to make a good start in Q1 in 22 years, and the bottom of the real estate side is expected to 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”. After being included in carbon trading, it may accelerate the improvement of supply side concentration, and 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.
Recommend [ Gansu Shangfeng Cement Co.Ltd(000672) ], [ Huaxin Cement Co.Ltd(600801) ], leading [ Anhui Conch Cement Company Limited(600585) ] with better growth, and pay attention to Jiangxi leading [ Jiangxi Wannianqing Cement Co.Ltd(000789) ] and northwest leading [ Gansu Qilianshan Cement Group Co.Ltd(600720) ] which are expected to benefit from infrastructure development.
