20150914-中国银河国际证券-China_Cement_Weekly_12页_965kb

报告摘要

China Cement Weekly Summary - September 14, 2015

Core Content Overview

This report provides an analysis of the cement sector in China, focusing on price trends, production data, market consolidation activities, and valuation metrics for key companies. It also includes regional cement price breakdowns and market share data by region and company.

Main Market Trends

Cement Prices: Cement prices increased by 0.16% week-on-week (WoW) to RMB253.33/tonne. Short-term price recovery was mainly observed in the eastern and southern central regions of China.
Coal Prices: Coal prices fell by 1.7% WoW, with the comprehensive average price index for Bohai-Rim Steam Coal (Q5500K) dropping to RMB402/tonne, representing a 16.6% YoY decline.
Cement Production: Cement production volume in August 2015 declined by 4.2% YoY to 215 million tonnes. However, there was a slight improvement of 4.7% in July.
Fixed Asset Investment: Fixed asset investment (excluding rural areas) grew by 10.9% in 8M2015, down from 11.2% in 7M2015. The report suggests that growth is expected to improve in Q4 due to increased government efforts to boost investment through construction bonds and lower capital requirements.

Market Consolidation Activities

Tianrui Group: Acquired Henan Yongan Cement for RMB842 million, issuing 520.2 million new shares (17.81% of enlarged capital). Henan Yongan Cement reported RMB4.2 million net profit in 8M15 and had a net asset value (NAV) of RMB642 million at the end of August.
Anhui Chaodong Cement: Announced plans to sell its entire cement-related business to Anhui Conch (16.28% stake) in cash. The target had RMB435 million in cement revenue and 2.53 million tonnes in cement & clinker sales in 1H15. The acquisition would enhance Anhui Conch's regional competitiveness.

Cement Stock Performance

Stock Price Movement: Cement stocks under coverage rose by 11.9% last week, indicating a slight recovery in market sentiment.
Top Performer: BBMG [2009.HK; BUY] was the best performer, up 23.6%.
Weakest Performer: CR Cement [1313.HK; BUY] was the weakest, up only 3.6%.

Valuation Table Highlights

Company	Ticker	Rating	Price (HK$)	Market Cap (US$m)	PER(x) 2014	PER(x) 2015E	PER(x) 2016E	PBR(x) 2014	PBR(x) 2015E	PBR(x) 2016E	EV/EBITDA(x) 2015E	EV/EBITDA(x) 2016E
Anhui Conch	914 HK Equity	BUY	23.70	15,621	9.0	12.7	12.0	1.58	1.44	1.33	5.8	7.0
CNBM	3323 HK Equity	BUY	4.81	3,329	3.7	9.0	5.1	0.53	0.50	0.46	7.5	9.4
BBMG	2009 HK Equity	BUY	5.56	5,495	10.8	10.9	7.6	0.67	0.66	0.63	8.6	8.7
CR Cement	1313 HK Equity	BUY	3.73	3,124	5.7	7.6	7.4	0.86	0.80	0.74	5.1	6.7
Shanshui Cement	691 HK Equity	SELL	6.29	2,725	45.9	42.2	34.7	1.58	1.52	1.47	10.6	10.3
Simple Average					15.0	16.5	13.4	1.04	0.99	0.93	7.5	8.4
Weighted Average					11.7	14.1	12.0	1.22	1.14	1.06	6.9	7.9

Peer Comparison Highlights

Company	Market Cap (US$m)	PER(x) 2014	PER(x) 2015E	PER(x) 2016E	PBR(x) 2014	PBR(x) 2015E	PBR(x) 2016E	EV/EBITDA(x) 2015E	EV/EBITDA(x) 2016E
Anhui Conch	15,621	9.0	12.7	12.0	1.58	1.44	1.33	5.8	7.0
CNBM	3,329	3.7	9.0	5.1	0.53	0.50	0.46	7.5	9.4
BBMG	5,495	10.8	10.9	7.6	0.67	0.66	0.63	8.6	8.7
CR Cement	3,124	5.7	7.6	7.4	0.86	0.80	0.74	5.1	6.7
Shanshui Cement	2,725	45.9	42.2	34.7	1.58	1.52	1.47	10.6	10.3
TCC International	970	2.7	14.9	9.4	0.30	0.35	0.34	4.1	9.5
China National Materials	842	10.7	9.8	9.5	0.39	0.38	0.35	6.2	6.8
Asia Cement	496	7.6	5.2	4.0	0.33	0.33	0.31	4.4	7.7
West China Cement	855	-	25.9	11.1	0.89	0.81	0.79	6.8	7.0
Tianrui Cement	600	6.7	n.a.	n.a.	0.52	n.a.	n.a.	6.9	n.a.
Simple Average		10.3	15.4	11.2	0.76	0.75	0.71	6.6	8.1
Weighted Average		11.0	13.9	11.5	1.14	1.06	0.99	6.8	7.7

Regional Cement Price Trends

East China: Prices rebounded in parts of Jiangsu, Anhui, and Guangdong, with price increases of RMB10~20/tonne.
South Central China: Prices were up in Guangdong and other regions, with a focus on potential supply control measures through production suspension along the Yangtze River.
North China: Prices were relatively stable, with some fluctuations in Hebei and Shanxi.
Northeast China: Prices were generally stable, with some activity in Liaoning.
Southwest China: Prices were up in Sichuan and Guizhou.
Northwest China: Prices were relatively low, with some activity in Gansu and Shaanxi.

Market Share in Terms of Clinker Capacity (2014)

East China: Anhui Conch (51.7%), CNBM (26.5%), BBMG (14.3%), and others.
South Central China: Guangxi (23.1%), CNBM (11.0%), CR Cement (10.5%), and others.
North China: CNBM (32.0%), Shandong (28.3%), and others.
Northeast China: CNBM (57.5%), BBMG (14.4%), and others.
Southwest China: CNBM (36.6%), Asia Cement (21.4%), and others.
Northwest China: Gansu (58.3%), Shaanxi (21.5%), and others.

Key Takeaways

Cement prices showed a slight recovery in the eastern and southern central regions.
Market consolidation is ongoing, with major acquisitions and potential mergers.
Fixed asset investment growth is expected to improve in Q4 due to government measures.
Cement stocks rebounded, with BBMG being the top performer.
Valuation metrics indicate varying levels of growth potential and market sentiment.
Regional price and market share data highlight the concentration of production and sales in certain areas.

Disclaimer

This report is issued by Galaxy International Securities and is not directed at, or intended for distribution to, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability, or use would be contrary to applicable law or regulation. No representation or warranty is made regarding the accuracy, correctness, or completeness of the information. The report is for institutional clients only and is not an offer, invitation, or solicitation to buy or sell any securities. Past performance is not indicative of future results. The recipient should understand the investment objectives and related risks and consult their own financial advisers if necessary.

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