【研究报告内容摘要】
National cement ASP rose 0.4% last week toRMB323/tonne. Cement prices saw RMB10-30/tonneincreases in eastern, central, southern andsouthwestern China. It is not unusual to see cementprice hikes in mid-to-late September. Demandcontinues to improve and we saw majorimprovements in daily shipment volume along theYangtze Delta River region. Prices remained stable inthe north, northwest and northeast.
National inventory improved 1% to reach 67%.
Significant improvement was recorded in theinventory level in southern China, where inventorydeclined 3% to reach 69%. Eastern and northwesternChina were below the national average. Inventorylevels remain high in central and northern China. Theinventory situation in the southwest at 78% is theworst among all the regions in China, mainly due toheavy rains.
CCBIS view
We expect cement ASP to rise post the NationalDay holidays. National cement ASP has beenstabilizing for a month. We finally saw price hikesacross eastern, central, southern and southwesternChina just prior to the Mid-Moon Festival. Most of theleading cement producers are planning to shut downproduction lines over the next week to alleviate supplypressure. Cement demand should return after theNational Day holidays when construction projectsresume.
We still prefer the southern and eastern cementmarkets in 2H13F. The southern and eastern regionshave been relatively slow to add new capacity so theinventory levels there are among the lowest in thecountry. In our view, CR Cement (1313 HK, Neutral)and Anhui Conch (914 HK, Not Rated) will benefit themost from their southern and eastern exposure.
We are turning positive on the China cementsector. In terms of forward P/E and P/B ratios, thesector is now trading at 1 standard deviation below its3-year mean. Valuations look attractive.