On March 30, or boosted by the recent recovery of real estate and other news, the long silent A-share cement sector was red across the board.
According to the wind cement index, Huaxin Cement Co.Ltd(600801) led the rise by more than 7%, while Fujian Cement Inc(600802) , Gansu Shangfeng Cement Co.Ltd(000672) , Xinjiang Qingsong Building Materials And Chemicals(Group)Co.Ltd(600425) , Jiangxi Wannianqing Cement Co.Ltd(000789) , Tangshan Jidong Cement Co.Ltd(000401) , etc.
Cement stocks will usher in the long-awaited "spring agitation" in the marketP align = "center" performance of cement index on March 30
Looking back at the whole cement market, since the second half of last year, due to the slowdown in the growth rate of real estate and infrastructure investment, superimposed with the adverse effects of repeated epidemics and the winter in the north, the cement market demand in many places has been weak and continues to this day.
"Real estate will remain stable and weak, and the decline in demand for cement is inevitable, but infrastructure will become a key force to support cement demand. Especially in March and April this year, the demand for cement by infrastructure may erupt." Chen Bolin, Deputy Secretary General of China Cement Association and director of information research center, spoke bluntly in a media interview earlier.
real estate recovery, accelerated infrastructure construction and cement demand are expected to boost
As an important support for cement demand, the performance of real estate was weak in the first two months of this year. According to the latest data from the National Bureau of statistics, the growth rate of real estate development investment from January to February was only 3.7%, the lowest since August 2020. In addition, the land purchase area decreased by 42.3% year-on-year, the largest decline in history.
"Due to the reduction of major projects, the local cement demand is expected to decline by 10% - 20% this year." Some cement enterprises spoke bluntly when they were surveyed earlier.
However, since March, the signs of recovery of the real estate market have increased significantly, and many places across the country have successively introduced deregulation policies of the real estate market, such as reducing mortgage interest rates and relaxing purchase restrictions. According to the data of China Index Research Institute, the overall trading volume of the real estate market in representative cities has increased since March. Among them, the first and second tier cities increased significantly month on month, but the year-on-year decline was further expanded due to the high base of last year.
how dense is the good news in the property market? Specifically:
On March 1, Zhengzhou launched the "first shot" of loosening the real estate policy in second tier cities. A total of 19 multi-dimensional and vigorous policies were issued, including deregulation of "housing and loan recognition", increase and price reduction of housing loans, and loan support to real estate enterprises, making it the first city in China to deregulate "housing and loan recognition" in an all-round way.
On March 23, Harbin plans to cancel the regional sales restriction policy implemented for nearly four years, which is also the first shot to cancel the sales restriction in the provincial capital city after Harbin loosened the regulation of the real estate market again in half a year.
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In March 30th, the Fuzhou restriction policy was released to a certain extent. It would purchase houses for non five urban registered residence families (including Hong Kong, Macao and Taiwan) in five cities of Fuzhou, without providing a medical social security or tax certificate or settlement for 12 months in the past two years, and then buy a set of ordinary residential houses under 144 square meters in Fuzhou city.
In addition, the mortgage interest rates in Suzhou, Hangzhou, Nanjing, Wuhan and other cities decreased. According to the monitoring of the shell Research Institute, in March, 82 of the 103 cities lowered the mainstream mortgage interest rate, including 20 cities such as Suzhou, Shenzhen and Shanghai, with the first mortgage interest rate lower than 5%. The interest rate of 4.6% appears in some regions, which is the same as the LPR quotation of more than 5 years this month.
"The recovery of the property market is bound to boost the demand for building materials and cement. However, the effect of the current stimulus policy on the real estate market remains to be seen." In this regard, industry insiders speak frankly. "Moderately advanced" infrastructure is expected to become a key force supporting cement demand, or it has become a consensus in the industry. "Driven by the steady growth policy, the demand for infrastructure investment has increased. It is expected that with the gradual release of subsequent infrastructure projects and the marginal relaxation of real estate policy, the demand of the cement industry will gradually pick up." China Galaxy Securities Co.Ltd(601881) securities research report said.
The 2022 government work report points out that the fiscal expenditure in 2022 will expand by 2 trillion yuan compared with that in 2021, and there is a large space for fiscal development; From the perspective of the progress of the issuance of special bonds, 836.1 billion yuan was issued from January to February, accounting for more than 20% of the annual quota. The financial expenditure is obviously ahead of schedule. It is expected that more physical workload will be formed in the second quarter. With the support of many major projects, the cement demand in the second quarter will be strongly supported.
Accelerated pace of special bond issuance (unit: 100 million yuan) picture source: cement big data
Boc International (China) Co.Ltd(601696) believes that the accelerated issuance of special bonds in the second half of 2021 is expected to form infrastructure demand in the first half of 2022, and cement is likely to benefit from infrastructure recovery and real estate easing Tianfeng Securities Co.Ltd(601162) it is estimated that the marginal improvement of infrastructure in the first quarter of 2022 will drive the demand of cement sector.
For the trend of the whole year, Li Kunming of cement big data research institute also said: "it is expected that the cement demand will improve significantly in the second quarter. In the future, the cement demand is not pessimistic, and the industry will still maintain strong toughness."
costs are high and environmental protection is imminent. The transformation and upgrading of cement enterprises is "on the line"
In March, the performance disclosure of cement listed companies also ushered in the peak.
At present, Huaxin Cement Co.Ltd(600801) , Tangshan Jidong Cement Co.Ltd(000401) , Anhui Conch Cement Company Limited(600585) , Gansu Qilianshan Cement Group Co.Ltd(600720) etc. have disclosed the annual report of 2021. The annual report shows that affected by factors such as rising coal and electricity costs and weak real estate demand, corporate profits are under pressure. According to the data of the Ministry of industry and information technology, the total profit of the cement industry in 2021 was 169.4 billion yuan, a year-on-year decrease of 10%.
For example, the performance of the industry leader Anhui Conch Cement Company Limited(600585) 2021 declined for the first time in nearly six years, realizing an operating revenue of 167953 billion yuan, a year-on-year decrease of 4.73%; The net profit was 33.267 billion yuan, a year-on-year decrease of 5.38%.
"As the growth rate of cement slows down, the demand for fixed assets increases and the demand for fixed assets increases in 2021." Anhui Conch Cement Company Limited(600585) Board Secretary Zhou Xiaochuan said frankly at the performance presentation meeting held on March 30. According to the data, in 2021, Anhui Conch Cement Company Limited(600585) the comprehensive cost of cement clinker was 203.34 yuan / ton, an increase of 30.7 yuan / ton or 17.78%.
Gansu Qilianshan Cement Group Co.Ltd(600720) 2021 annual report shows that the company's main business income is 7.673 billion yuan, a year-on-year decrease of 1.78%; The net profit attributable to the parent company was 948 million yuan, a year-on-year decrease of 34.07%. The company's performance fell year-on-year mainly due to the insufficient commencement of infrastructure projects in the sales area, the year-on-year decline in cement sales and the sharp rise in coal prices.
Huaxin Cement Co.Ltd(600801) 2021 annual report also shows that the company achieved a revenue of 32.464 billion yuan, a year-on-year increase of 10.59%; The net profit attributable to the parent company was 5.364 billion yuan, a year-on-year decrease of 4.74%.
"Although the total profit of the cement industry decreased by 10% in 2021, historically, the profit level is still very good." Chen Bailin said. In his opinion, the main reason for the decline of profits in 2021 is the high cost and production reduction measures, resulting in a large loss of actual profits. It is expected that the profit of the cement industry will be stable in the future, or between 150 billion yuan and 200 billion yuan.
It is worth noting that under the background of cost pressure and environmental protection, the green transformation and upgrading of cement enterprises has been significantly accelerated. For example, according to the Huaxin Cement Co.Ltd(600801) annual report, the company accelerated the layout of non cement business and realized the integrated transformation and development of industrial chain of aggregate, concrete, wall materials, environmental protection, packaging and equipment engineering with cement business as the core.
Picture source: Huaxin Cement Co.Ltd(600801) 2021 Annual Report
According to the annual report data, Huaxin Cement Co.Ltd(600801) non cement business performed well. In 2021, Huaxin Cement Co.Ltd(600801) the total sales of cement and clinker were 75.27 million tons, a year-on-year decrease of 0.96%; The aggregate sales volume was 34.97 million tons, with a year-on-year increase of 51.71%; The total disposal volume of environmental protection business was 3.28 million tons, with a year-on-year increase of 11.56%; The sales volume of commercial concrete was 9.05 million m3, a year-on-year increase of 96.49%. On March 28, 2022, Huaxin Cement Co.Ltd(600801) as the first order of "B to h" in Shanghai stock market, was officially listed in Hong Kong stock market, accelerating the internationalization process of the company.
Anhui Conch Cement Company Limited(600585) has made great efforts in the field of new energy. The company completed the equity acquisition of conch new energy in 2021, adding 19 photovoltaic power stations and 3 energy storage power stations. By the end of 2021, the photovoltaic installed capacity will be 200MW, and plans to add 800MW in 2022.
According to the analysis of Orient Securities Company Limited(600958) Research Report, photovoltaic power generation can reduce fuel and power costs, which accounted for 55.4% of the cost of cement clinker in Anhui Conch Cement Company Limited(600585) 2021. As an industry leader, the company has strong demand for energy consumption transformation and upgrading. In 2022, Anhui Conch Cement Company Limited(600585) planned capital expenditure was 23.5 billion yuan, an increase of 46.69% compared with the actual expenditure in 2021, which was mainly applied to project construction / environmental protection technical transformation / M & A, and the implementation of the project is expected to be accelerated.
Earlier, Anhui Conch Cement Company Limited(600585) just released a new energy business investment plan of 5 billion yuan, which plans to develop photovoltaic power stations and energy storage projects to achieve full coverage of photovoltaic power generation in subordinate factories.
