Recent developments in the cement industry: the cement index rose 7.85% last week, outperforming the building materials index and CSI 300. From January to February, the cement output was 199 million tons, a year-on-year decrease of 17.8%. Mainly due to the poor performance of the demand side, the average value of the overall cement shipment rate from January to February was 12 PCT lower than that of the same period last year, and the efforts of peak shift shutdown were strengthened. Last week, the national cement market price was 512 yuan / ton, up 3.2 yuan / ton month on month. The price rise areas mainly include Beijing, Gansu and Shaanxi, with a range of 20-50 yuan / ton; The falling areas are parts of Hubei, Chongqing and Guizhou, with a range of 10-30 yuan / ton. At the end of March and the beginning of April, the demand performance of China's cement market was still poor, which was mainly affected by epidemic prevention and control and rainy weather. The shipments of enterprises in different regions were maintained at 40-80%. In terms of price, affected by multiple adverse factors, the market has been seriously oversupplied recently, the inventory has been rising, the sales pressure of enterprises has doubled, and the prices in some areas have fallen. Given that it is difficult to end the impact of short-term epidemic prevention and control, and some enterprises have successively started or extended off peak production in order to alleviate the supply pressure, the cement price will maintain the shock adjustment trend in the later stage. In addition, once the epidemic prevention and control is lifted, the downstream demand will also be released.
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, the confidence of steady growth is further strengthened, and cement is expected to benefit. We judge that the demand side of the whole year is still resilient. It is 22q1 or the low point of 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.
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.
