Recent developments in the cement industry: the cement index rose 7.33% last week, and a restless market is coming. Last week, many major projects started intensively, and many announced the investment scale of key projects in the new year. From the trend, the investment scale of major projects in various places increased steadily, and the field of infrastructure construction still occupies an important position. Last week, the national cement market price was 526 yuan / ton, down 13.9 yuan / ton month on month, up 74.2 yuan / ton year-on-year. The price drop areas are still around East China, Central South and southwest China, with a range of 30-60 yuan / ton. After new year's day, as the off-season approaches, the demand of China's cement market continues to weaken, and the cement price also continues the downward trend. Cement enterprises in the South began to release the peak shifting production plan in the first quarter. Considering the poor market demand, the peak shifting production time of local enterprises will generally increase compared with the same period of last year. In terms of price, it is expected that there will be another round of reduction in some areas next week. After January 15, the cement price in most areas will tend to be stable.
Core view: there is an obvious "restless spring" market in the cement index. In recent 20 years, the Q1 cement index has risen for 13 years, outperforming the Shanghai Composite Index for 16 years, and the average relative return in recent five years is 7%. We believe that the combination of the steady growth policy and the high starting point of prices at the beginning of the year provides favorable support for this round of agitation, and the market can be expected in spring. In the future, the industry will focus on the opportunities brought by the change of the industry supply side under the objectives of "double control" and "double carbon": a) the policy requires that the proportion of benchmark capacity in 2025 will 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 2022. 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 72 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 the Q1 infrastructure side will make a good start in 22 years, and the bottom of the real estate side will 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". If carbon trading is included in 22 years, or the improvement of supply side concentration is accelerated, the improvement of leading share is expected to support performance growth. From the perspective of dividend yield and valuation, cement company has high investment cost performance.
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).
