Recent developments in the cement industry: the cement index rose 0.27% last week, outperforming the CSI 300 and building materials index. Last week, the national cement market price was 513 yuan / ton, down 2.4 yuan / ton month on month, and the cement price in East China rose 3.6 yuan / ton. The price increases are mainly in some areas of Hunan, Chongqing, Guizhou and Hubei, with a range of 20-40 yuan / ton; The price decline areas mainly include Jiangxi, Henan, Hunan, Guizhou and Sichuan, with a range of 20-30 yuan / ton; The price rise areas are Shanghai, Zhejiang, Jiangsu and Chongqing, with a range of 20-40 yuan / ton. At the end of February and the beginning of March, the weather improved, and the demand of China's cement market officially entered the recovery period, but the overall performance was weak. The shipment rate of enterprises in the south only recovered about 60%, and that in the North was 2-30%, both 20% - 30% lower than that in the same period last year. In terms of price, due to the slow recovery of local cement market demand, some enterprises are eager to increase shipments, resulting in price shock and adjustment trend.
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 government work report mentioned the target of GDP growth of 5.5% in 2022, which further enhanced the confidence of steady growth, Cement is expected to benefit. 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) ], focusing on 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.
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.
