Recent developments in the cement industry: the cement index fell 6.39% last week, outperforming the building materials index. From January to March, the cement output was 387 million tons, a year-on-year decrease of 12.1%. In March, the monthly output was 187 million tons, a year-on-year decrease of 5.6%, and the decline was narrowed month on month. In March, the demand began to improve, but in the latter half of the month, affected by the local epidemic, the demand recovery was blocked. The average overall cement shipment rate in March was 62%, 7 PCT lower than that of the same period last year. As of the end of last week, the national cement shipment rate reached 64%, 22 PCT lower than that of the same period last year. Last week, the national cement market price was 510 yuan / ton, up 1.0 yuan / ton month on month. The price increases are mainly in Liaoning, Guangdong, Guizhou and some parts of Yunnan, with a range of 30-80 yuan / ton; The falling areas include Zhejiang, Jiangsu, Fujian and Chongqing, with a range of 10-50 yuan / ton. In the middle and late April, the demand performance of the national cement market was still weak, and the shipment rate of enterprises remained at the level of 6-80%. With the implementation of peak shifting production by enterprises in some regions, the rising pressure of inventory continued to ease, and the cement price maintained a volatile adjustment trend. With the expected turning point of the epidemic in Shanghai approaching, the demand may usher in a centralized release, and the price deposit is expected to rise. At present, the gross profit per ton of cement enterprises has been flat or better year-on-year. Driven by the price rise, Q2 Profit is expected to improve significantly.
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, Guangdong Tapai Group Co.Ltd(002233) , Gansu Qilianshan Cement Group Co.Ltd(600720) successively disclosed the announcement of pre deduction of performance in the first quarter, and the net profit excluding non parent company decreased by 50% – 60% and 73% – 88% year-on-year. We expect that the sales volume and gross profit per ton are lower than last year, but we judge that 22q1 or the industry low point. After the Q2 epidemic recovers, with the weakening of the impact of coal price year-on-year + the opening of price rise, the performance may improve quarter by quarter, and the whole year is still expected to achieve steady growth, The valuation is expected to be repaired. 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. 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 stocks still have high investment performance price ratio.
Recommend [ Gansu Shangfeng Cement Co.Ltd(000672) ], [ Huaxin Cement Co.Ltd(600801) ], faucet [ Anhui Conch Cement Company Limited(600585) ], and pay attention to Jiangxi faucet [ Jiangxi Wannianqing Cement Co.Ltd(000789) ] and northwest faucet [ Gansu Qilianshan Cement Group Co.Ltd(600720) ], which are expected to benefit from the development of infrastructure. The growth of concrete water reducing agent is better and the faucet is better α Outstanding, the first is [ Sobute New Materials Co.Ltd(603916) ].
