Recent developments in the cement industry: the cement index fell 1.07% last week. The Ministry of industry and information technology issued the "14th five year plan" for the development of raw material industry. The plan mentioned that in 2025, the production capacity of key raw materials and bulk products such as cement will only be reduced, and the energy consumption per unit clinker of cement products will be reduced by 3.7%. It will study and establish a restraint mechanism to curb the expansion of excess capacity by means of carbon emission, pollutant emission and total energy consumption, During the 14th Five Year Plan period, the supply side of the cement industry may continue to optimize. Last week, the national cement market price was 540 yuan / ton, down 7.7 yuan / ton month on month, up 85.2 yuan / ton year-on-year. Prices fell in Jiangsu, Anhui, Fujian, Henan, Hubei, Guangdong and Chongqing, with a range of 30-60 yuan / ton. At the end of December, affected by the temperature drop and the early shutdown of engineering projects, the demand of China's cement market continued to weaken month on month, the average shipment rate of national key cement enterprises decreased to 47%, a year-on-year decrease of 12 percentage points, and the cement price continued to decline.
Core view: we expect marginal improvement in demand in the first half of 22 years, valuation or repair first, but it is difficult for the medium and long-term demand side to support the plate out of the sustainable market. In the future, the industry will focus on the opportunities brought by the change of industry supply side under the objectives of "double control" and "double carbon": a) the policy requires that the proportion of benchmark capacity in 2025 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 may be incorporated into carbon trading in 2021. The transformation of carbon tax + emission reduction will aggravate the cost pressure of small enterprises, highlight the leading competitive advantage, and is expected to further expand through mergers and acquisitions, enhance the voice, and gradually raise the price center. At present, the price difference of water and coal is 82 yuan / ton higher than that of last year, reflecting that the profit of the enterprise is better than that of last year. We believe that the cement price may still be slightly adjusted in January, but it is unlikely to fall sharply. The price is at a high starting point in the beginning of 22 years. On the demand side, it is expected that there will be marginal improvement on the infrastructure side in Q1 in 22 years, the bottom of the real estate side will pick up, and the demand is expected to begin to improve. Although the medium and long-term demand shows a slow downward trend, the improvement on the supply side may be greater under the background of carbon emission reduction, and the profits of leading enterprises are still expected to grow.
From the perspective of growth, [ 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 wing and two wings injects new vitality into the company), and [ Anhui Conch Cement Company Limited(600585) ] (a national leader with both scale and cost advantages, which 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.
