Recent developments in the cement industry: last week, the cement index rose 0.94%, and the cumulative increase after the festival reached 11.67%, significantly ahead of the performance of the Shanghai and Shenzhen stock index. Last week, the national cement market price was 514 yuan / ton, down 1.6 yuan / ton month on month. The price drop areas are mainly Tianjin, Jiangsu, Sichuan and other local areas, with a range of 20-30 yuan / ton; The price of clinker in Hunan, Guangxi, Chongqing and Xinjiang increased by 30-50 yuan / ton, and the price of clinker in the Yangtze River Delta increased by 30 yuan / ton again. In mid February, due to the repeated influence of off-season factors, rain and snow weather and epidemic situation in some areas, the downstream demand started slowly, the shipment of enterprises in different regions only recovered by 10% - 30%, and the cement price in some regions fluctuated and adjusted slightly. After the Spring Festival, the downstream demand recovered slowly, within expectations. On the one hand, the demand performance was weak in the fourth quarter of last year, the return of funds from the mixing plant was poor, and the enthusiasm for construction was low; On the other hand, the government has increased the investment in infrastructure, which reflects the lag in the pull of cement demand. The cement demand in the opening market is mainly continuous projects. In addition, the point recurrence of the epidemic also restricts the return of workers in some areas.
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 was 35.3%, the lowest in 21 years was 14.5%, and the maximum increase of the cement index since the beginning of the year was only 10%. We believe that the current policy environment is more favorable than that in 21 years, and there is still room for subsequent increase, The potential demand for 22q1 cement (delayed demand in the second half of last year + commencement of key projects) may exceed that in the same period of last year. The release of demand depends on the construction conditions and capital landing. If it is effectively landed, the downstream demand is expected to increase significantly by the end of February and the beginning of March due to the stronger restriction of staggered peak shutdown at the production end of the supply end in the first quarter or the shortage of local water and mud, Cement market is expected to usher in further catalysis. In the medium and long term, cement has entered a period of downward demand. In the future, the industry will focus on the opportunities brought by the change of the industry's supply side under the objectives of "dual control" and "dual carbon": a) the policy requires that the proportion of benchmark capacity in 2025 will exceed 30%, and the industry's capacity of 2500t / D and below is expected to withdraw one after another in the future, 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. 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.
