Recent industry trends and core views:
Recent developments in the cement industry: the cement index rose 2.45% last week, outperforming the building materials index. Last week, the national cement market price was 504 yuan / ton, down 7.6 yuan / ton month on month. The price drop areas are mainly concentrated in East and central China, ranging from 20-50 yuan / ton; The rising areas include some areas in Guizhou, Yunnan and Huizhou, Guangdong, with a range of 30-40 yuan / ton. At the end of April, affected by the recurrence of the epidemic, rainy weather and the shortage of downstream funds, the downstream demand performance of China’s cement market remained poor. The average shipment rate in key regions across the country remained at 60%, more than 20 percentage points lower than that in the same period last year. Affected by this, the cement price fluctuated downward. With the expected inflection point of the epidemic in East China 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 follow-up growth. The government work report mentioned the goal of GDP growth of 5.5% in 2022, and the confidence of steady growth was further strengthened. We judge that the demand side of the whole year is still resilient. According to our statistics, the total revenue of 22q1 cement company was + 35.1% year-on-year, and the net profit attributable to the parent decreased by 8.9% year-on-year. Among them, the performance of Gansu Shangfeng Cement Co.Ltd(000672) , Huaxin Cement Co.Ltd(600801) and other companies was significantly better. The price of Q1 cement is still higher than that of the same period last year, reflecting that the price transmission capacity is still, but the profit is declining due to more sales losses. We judge 22q1 or the low point of the industry. After the recovery of Q2 epidemic, the demand is expected to start to pick up. With the year-on-year weakening of the impact of coal price + the opening of price rise, the performance may improve quarter by quarter. It is still expected to achieve steady growth throughout the year and 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) ].
