Recent developments in the cement industry: the cement index fell 3.43% last week, outperforming the CSI 300 and building materials index. Last week, the national cement market price was 515 yuan / ton, up 2.6 yuan / ton month on month. The price increases are mainly in Jiangsu, Shandong, Henan and Hubei, with a range of 20-50 yuan / ton; The price drop areas are Chongqing, Gansu and Shaanxi, with a range of 20-60 yuan / ton. In early March, the demand of China's cement market continued to rise slowly, and the shipment rate of enterprises in different regions increased by 10% - 20% month on month. The demand in the south basically recovered by 70-80%, while in the north, limited by the low temperature and the recurrence of the epidemic, it only recovered to the level of 20-40%. In terms of price, with the gradual increase of market demand and driven by the rising costs of coal, oil price and freight, the price of cement in many places shows an upward trend. Generally speaking, the demand performance of Jiangxi, Hunan, Guangxi and Guizhou in East China, Central South and southwest China is relatively sluggish, and the demand recovery of other provinces is acceptable. It is expected to reach 80-90% or normal level next week; The three north areas still need to be restored.
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. 22q1 or low in the industry. From Q2, with the year-on-year weakening of the impact of coal price + the opening of price rise, the performance may improve quarter by quarter. 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.
