【研究报告内容摘要】
We expect cement ASP to stabilize for the rest ofAugust. As summer production halts gradually comes toan end and power rationing situation improves, supplygrowth will catch up, which is likely to preclude pricehikes in late August before demand picks up with theonset of high season in September. September toNovember is traditional high season for cement demandwhen we expect cement ASP to rally. However, becauseof the high base in 3Q13F, the magnitude of the pricehike in 4Q13F is likely to be less than that it was in 4Q12(5.4% QoQ).
Cement production growth in July largely flat, downby 0.1ppt to 9.6%. Fixed-asset investment grew20.1% YoY in July, flat MoM and 0.35% lower YoY.
Property investment realized 20.5% YoY growth in Julyversus 20.3% YoY in 1H2012. However, we expect FAIgrowth to accelerate in the second half of the year asmore infrastructure projects begin construction, includingsocial housing and shanty town reforms.
We are more positive towards the sector onimproving demand-supply outlook. Anhui Conch(914 HK, Not Rated) and CR Cement (1313 HK,Outperform) are our sector top pick. 2013F volumegrowth are 20% and 17% YoY respectively for eachname, together with ASP improvements during highseason in 2H13, we recommend those two names ongood earnings potential.