Cement Producers

[winston]

Vested - CNBM

DJ MARKET TALK: Daiwa Tips China Cement Sector Re-Rating

0840 [Dow Jones] Daiwa tips "a year of prosperity" in terms of prospects for the Chinese cement sector, as China's plans and policies--the West Development Plan, social-security housing, suspension of approvals for building new cement-production lines and the cement subsidy programme in rural areas, to name just a few--bode well for the sector.

At the individual company level, the house expects the acceleration of industry consolidation to translate into above-industry volume growth, stronger pricing power and brighter earnings prospects (with high visibility) for the leading cement players.

Daiwa's top sector picks are China Resources Cement (1313.HK), China National Building Materials (3323.HK) and West China Cement (2233.HK); all 3 are rated Buy with target prices of HK$8.25, HK$26.00 and HK$3.90 respectively.


Source: Dow Jones Newswire

[winston]

China Cement

Not vested

DJ MARKET TALK: CS Prefers China Cement Plays Like CR Cement,CNBM

1204 [Dow Jones] Credit Suisse says major listed China cement producers cut cement prices by 7.0%-14% during the first week of January, as demand and power restrictions ease.

The house estimates that the current unit gross profit is CNY20-CNY60/ton higher than its 2011 assumptions; while it expects further softening in cement prices in the coming 1-2 months, "upside risk remains in margins," particularly for producers in regions with better pricing power, such as the Yangtze Delta region and southern China.

CS believes the industry's ability to protect margins in a weak demand environment has improved over the past 10 years and margin upside will drive positive earnings momentum in 2011;

It's most preferred stocks are China Resources Cement (1313.HK), underpinned by its ongoing M&A story, and China National Building Material (3323.HK), with higher beta-to-margin upside.

CR Cement is down 0.2% at HK$5.96, while CNBM is off 1.8% at HK$19.14.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: China Cement Sector Has Margin Upside - CS

1420 [Dow Jones] Credit Suisse estimates the current unit gross profit in China cement sector is CNY0-50/ton, higher than its 2011 assumptions.

While it believes there's is likely further softening in cement prices post the lunar new year, "upside risk remains in the margins," particularly for producers in regions with better pricing power, such as the Yangtze delta region and Southern China.

"We believe the industry is demonstrating improving ability to protect margins in a soft growth demand environment, and margin upside will drive positive earnings momentum in 2011," CS says; its most preferred sector names are CR cement (1313.HK), underpinned by its ongoing M&A story, and CNBM (3323.HK), with higher beta to margin upside.

Source: Dow Jones Newswire

[winston]

Chinese Cement

Not vested

DJ MARKET TALK: GS Tips A Sustained Cement Price Rise In China

1529 [Dow Jones] Goldman Sachs keeps its view that China's cement capacity growth is likely to peak in 2010, and cement supply will likely tighten from 2H11 despite slower FAI growth, suggesting "a sustained cement price rise."

The house adds, water conservancy projects add further upside to demand as cement is the key construction material used.

GS believes both Anhui Conch Cement (0914.HK) and CNBM (3323.HK) will benefit because Eastern China is one of the key regions for water conservancy projects; it adds, both are capable of supplying high-grade cement to be used in these projects, and both have an established distribution network in the rural market.

GS also says that welfare housing is "a hedge for property tightening," benefiting Anhui Conch. Anhui Conch is down 0.3% at HK$37.20, and CNBM is down 0.2% at HK$19.08, taking a breather after Monday's rally.


Source: Dow Jones Newswire

[winston]

China Cement

Not vested

DJ MARKET TALK: CNBM, Shanshui Are MS Top Cement Sector Picks

1336 [Dow Jones] STOCK CALL: Morgan Stanley keeps China National Buildings Material (3323.HK) at Overweight with a target price of HK$35; the house is "positively surprised" as CNBM management confirmed they have just raised Shandong cement prices by CNY10/ton and CNY20/ton for South Cement this week.

For 1Q, ASP and gross profit/ton reached CNY298/ton and CNY90/ton for China United and CNY328/ton and CNY100/ton for South Cement.

MS adds, CNBM Management is confident in achieving net profit/ton of $5/ton in 2011, and it reiterates CNBM as well as Shanshui Cement (0691.HK) as its top picks.

CNBM is up 2.1% at HK$29.00 at midday; Shanshui rises 1.6% to HK$7.48, after Anhui Conch Cement (0914.HK) says it expects 1Q11 net profit to rise over 150% on-year.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: Cement Stocks Rally; Valuation Attractive -Citigroup

1149 [Dow Jones] Hong Kong-listed China cement stocks are rallying, with some more than erasing Monday's losses, as investors further digest the Ministry of Housing and Urban-Rural Development's proposed national procurement platform for cement; this is aimed at speeding up the construction start of social housing and is likely to bode well for cement demand.

Citigroup says investors' knee-jerk reaction Monday, on fears of lower cement prices under the procurement platform, is overdone, as MOHURD doesn't have administrative power over cement price. The house says cement names are trading at "attractive valuation," and its top pick remains Anhui Conch Cement (0914.HK), which is trading at 10X FY11 P/E. Conch rallies 3.2% to HK$32.20 and China National Building Material (3323.HK) leaps 5.6% to HK$13.26.

Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: Cement Stks Rally Again; Fundamentals Solid - CS

1053 [Dow Jones] Hong Kong-listed China cement stocks are rallying for the second straight session, on expectations China's social housing program, which is off to a slow start so far this year, will accelerate in 2H.

Shanghai Securities News reported Tuesday that China's top economic planner has issued guidelines allowing local governments to issue bonds to finance social housing construction.

Credit Suisse says "fundamentals and earnings support remain solid" for the sector, and believes the sector's valuation remains fair, with upside risk in earnings for China National Building Material (3323.HK) and Anhui Conch Cement (0914.HK). CNBM rallies 4.9% to HK$14.18 on top of its 7.5% jump Tuesday; Conch is up 0.4% at HK$33.55, adding to its 7.1% rally Tuesday.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: HK Cement Stocks Firm; Now Good Time To Buy - GS

1334 [Dow Jones] Hong Kong-listed China cement stocks are mostly taking a breather after a two-day rally: China National Building Material (3323.HK) is up 0.1% at HK$14.48 after leaping an incredible 14.9% in the past two sessions; Anhui Conch Cement (0914.HK) is down 0.3% at HK$33.85.

The sector is spurred by optimism that the delayed China social housing program will accelerate in 2H, boosting demand for cement.

Goldman Sachs expects major Chinese cement names to "sustain above-cycle-average profitability and returns in FY12" on higher cement pricing year-on-year. It adds, despite much higher margins and ROEs in FY11 vs cycle average (2006-2010), on key multiples China cement stocks are trading well below recent troughs: FY04 amid strict tightening and FY08 financial crisis.

"All these indicate the current share prices are too bearish, in our view. We believe this strong risk/reward profile suggests now is a good time to buy Chinese cement stocks."

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: China Cement Stocks Rally; Still Undemanding

1411 [Dow Jones] Hong Kong-listed China cement stocks extend their rally in the afternoon, with sector leaders Anhui Conch Cement (0914.HK) and China National Building Material (3323.HK) setting 52-week highs.

The sector is spurred by Asia Cement (China) (0743.HK) guiding its 1H11 net profit will increase by 350% on year, suggesting that despite busy upward sector earnings forecast revisions by analysts over the past few months, consensus earnings are likely still conservative.

Anhui Conch rises 3.3% to HK$39.65, and is now on 14.7X FY11 and 12.4X FY12 consensus earnings, less attractive after the stock's 65% rally year-to-date, but valuation nonetheless remains undemanding, especially considering likely upward earnings revision ahead.

CNBM is up 3.2% at HK$16.78; Asia Cement is up 9.9% at HK$7.02.

Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: China Cement Names Rally More; Strong Fundamentals

1119 [Dow Jones] Hong Kong-listed China cement stocks continue to rally, with Shanshui Cement (0691.HK), Anhui Conch Cement (0914.HK) and China National Building Material (3323.HK) hitting fresh 52-week highs.

In the very near term, profit-taking is likely to emerge, given the sector' breathtaking run of late; CNBM, for example, is up 2.0% at HK$17.30 and its intraday peak of HK$17.58 marks a 38% run-up from its recent low of HK$12.54 set June 20.

On a longer-term horizon though, any pullback, if meaningful, should give investors entry points given that the sector is strong fundamentally.

The sector's rally Thursday was spurred by Asia Cement (China) (0743.HK) guiding that its 1H11 net profit will increase by 350% on-year, suggesting that despite busy upward sector earnings forecast revisions by analysts over the past few months, consensus earnings are likely still too conservative, especially given the expected strong cement demand in 2H driven by China's push to build affordable housing.

Source: Dow Jones Newswire