Recently, cement prices have risen, providing support for the rise of cement shares.
According to the market data of China cement network, the price of raw materials continued to rise, and the production cost of cement increased. In addition, the cement price in the main city of Chongqing and Western Chongqing continued to fall in March, reducing enterprise profits and increasing pressure. In order to improve profits, from April 5 to April 6, some major manufacturers raised the cement price by 100 yuan / ton in the main city and northwest Chongqing market. At the same time, cement enterprises in Guang’an, Sichuan, which is close to Chongqing, also issued a price increase notice, saying that the cement price will be increased by 100 yuan / ton from April 6.
Under the dual advantages of rising price + rising demand, the cement sector index closed positive for five consecutive days since March 30 and ended April 7, with a cumulative increase of 9.02% during the period, outperforming the Shanghai Composite Index (a cumulative increase of 1.02% during the period). Specifically, in terms of individual stocks, the cumulative growth during the period of three stocks, namely, the morethan 10%.
Regarding the recent strong performance of cement stocks, Chen Li, chief economist of Chuancai securities and director of the Research Institute, said in an interview with the reporter of Securities Daily, “The demand of the cement industry mainly comes from infrastructure and real estate. According to the data of the Bureau of statistics, from January to February 2022, China’s cumulative cement output was 199 million tons, a year-on-year decrease of 17.8%, while the growth rate of infrastructure investment increased by 8.1% and real estate development increased by 3.7% year-on-year. The current imbalance between cement supply and demand caused by the decline in supply and the increase in demand is the main reason for the rise in cement prices. In addition, coal prices continued to be high, and the rise in oil prices led to the rise of raw materials The rise of material freight will increase the cost of cement production to a certain extent. Infrastructure construction is an important starting point for steady growth this year. The investment growth rate in the first quarter is in line with expectations, and it is expected to exceed expectations in the second quarter. In addition, the real estate has warmed up, which has a positive driving effect on the cement sector. “
It can be seen that the operating performance of Listed Companies in the cement industry improved significantly in 2021 Hithink Royalflush Information Network Co.Ltd(300033) data show that as of April 7, 19 listed companies in the cement industry have disclosed their annual performance in 2021, and 10 companies achieved a year-on-year increase in net profit during the reporting period, accounting for more than 50%. Among them, Shan Dong Lubei Chemcal Co.Ltd(600727) , Anhui Wanwei Updated High-Tech Material Industry Co.Ltd(600063) , China Energy Engineering Corporation Limited(601868) , HuaSu Co., Ltd., Xinjiang Qingsong Building Materials And Chemicals(Group)Co.Ltd(600425) and other five companies achieved a year-on-year increase of more than 20% in net profit during the reporting period.
It is worth noting that the cement industry is also a high dividend industry. Among the cement companies that have disclosed the annual report of 2021, 17 cement companies have announced the annual dividend plan of 2021 (including the companies that have implemented the dividend plan and issued the dividend plan), and the proposed dividend amount is RMB 20.405 billion (A-share cement companies). Among them, Anhui Conch Cement Company Limited(600585) dividend is the most generous. The company plans to pay 23.80 yuan (including tax) for every 10 shares. Since its listing in 2002, it has paid cash for 14 consecutive years, with a total dividend of 66.06 billion yuan. Based on the closing price on April 7, Anhui Conch Cement Company Limited(600585) proposed dividend yield reached 5.88%; In addition, Huaxin Cement Co.Ltd(600801) , Tangshan Jidong Cement Co.Ltd(000401) , Guangdong Tapai Group Co.Ltd(002233) , Ningxia Building Materials Group Co.Ltd(600449) and other four companies also have high “red envelopes” for investors in 2021. The cash distributions of these four companies are expected to reach 1 yuan, 0.75 yuan, 0.62 yuan and 0.54 yuan per share respectively.
Among the above 17 cement companies that plan to pay dividends, based on the closing price on April 7, the proposed dividend rate of 11 companies in 2021 exceeds the one-year fixed deposit rate of the bank (1.75%) Tangshan Jidong Cement Co.Ltd(000401) plans to rank first with a dividend yield of 6.03%. The proposed dividend yield of Guangdong Tapai Group Co.Ltd(002233) also reaches 5.49%. The proposed dividend yield of Ningbo Fuda Company Limited(600724) , Huaxin Cement Co.Ltd(600801) , Gansu Qilianshan Cement Group Co.Ltd(600720) and other three companies is also 4% or above.
In terms of investment opportunities in the cement industry, Liu Youhua, research director of private placement network, told reporters, “We are optimistic about the investment opportunities brought by the low prosperity recovery of the cement sector: first, the steady growth policy continues to work, and the cement demand is expected to stabilize and recover; second, the demand originally restrained by the epidemic and rainfall is expected to be released intensively after the epidemic is relieved; third, the double carbon target will raise the production cost of the cement industry, promote the supply side reform of the cement industry, and the leading enterprises with technological advantages are expected to benefit; finally , from the perspective of valuation and dividend yield, the current investment cost performance of cement sector is prominent and has explosive potential. “
Chen Li further added, “the P / E ratio of the cement sector is about 9 times, and the valuation is low. The performance may improve in the first half of this year. In the current market environment, it has certain allocation advantages. In the long run, the cement industry as a whole has entered a period of downward demand. In the future, the supply side of the industry will be further adjusted under the background of ‘double control’ and ‘double carbon’. It is suggested to pay attention to the leading varieties of the industry with competitive advantages.”
Fu Zezheng, senior researcher of Yuanrong investment stock department, believes that the epidemic is expected to improve in the second half of the year. In the environment of stable growth throughout the year, infrastructure will become a key force to support cement demand. Cement demand will gradually recover, the industry may usher in a marginal turning point, and cement sector investment has cost performance at the current time point.
Table: list of cement market since March 30 p align = “center” prepared by Ren Shibi
