Cement Producers

[winston]

vested in Anhui & CNBM

DJ MARKET TALK: China Cement Stocks Down; Ignore Housing Start News

1104 [Dow Jones] News that China started building 9.86 million public housing units in the January-September period should be taken as a positive for cement companies; but the sector is facing profit-taking after strong rallies in the past two sessions.

Sector leaders Anhui Conch Cement (0914.HK) is down 4.2% at HK$20.35 after rebounding 17.5% over Thursday and Friday; China National Building Material (3323.HK) is down 4.4% at HK$6.94 after a 28.5% rally.

The Chinese government aims to start building 10 million public housing units this year, so the 9.86 million starts in the first nine months should be taken as a good figure.

Still, any positive boost from the public housing front is likely being offset by concerns over the private housing market, which is reeling from Beijing's relentless property curbs while fears are growing that it's entering an inevitable downtrend, which will hurt demand for cement.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: China Cement Stocks Rally; To Stay Volatile -DBS

1031 [Dow Jones] China cement stocks continue their fast and furious rally:

High-beta China National Building Material (3323.HK) jumps 8.7% to HK$9.08 on top of its 9.3% surge Wednesday, and has now recovered a jaw-dropping 64.8% from its trough of HK$5.51 hit Oct. 4, which in turn marks a 68.7% fall from its all-time high of HK$17.58 set July 8.

Technically, short-covering probably has a lot to do with the rally, while fundamentally, DBS Vickers tips stagnant 4Q cement prices given no sign of improvement in demand.

"We believe share prices will remain volatile before more visible economic guidance for FY12 is given at Central Economic Work Conference in December."

The house's stock pick in the sector is Shanshui Cement (0691.HK) as long-term value has emerged with cheap valuation and high dividend yield. Shanshui rallies 9.2% to HK$6.29.

Source: Dow Jones Newswire

[winston]

vested in Anhui & CNBM

DJ MARKET TALK: China Cement Sector Fundamentals Not Too Bad - UBS

0825 [Dow Jones] UBS says cement prices increased in most of the major cities south of the Jiangsu province, including Wuxi, Suzhou, Changzhou etc.

It has two positive readings from the price increase: the demand is actually not too weak and has seasonally strengthened; the market coordination still works.

"In the East of China, the market coordination and supply disciplines are most vulnerable in south of Jiangsu, and this round of price increase seems to be partly thanks to the kilns shutting down in the area," UBS says.

Overall, "fundamentals appear better than the street's bearish view... valuation looks too cheap and potentially the sector could have some rebound,"

UBS says and its top sector pick is Anhui Conch Cement (0914.HK). Conch jumped 7.8% to HK$24.85 Wednesday, China National Building Material (3323.HK) rallied 9.3% to HK$8.35.

Source: Dow Jones Newswire

[winston]

vested in Anhui & CNBM

DJ MARKET TALK: Buy China Cement Plays,Not Developers On Retreat - SHKF

1026 [Dow Jones] High-beta mainland developers are correcting more than the HSI's 1.2% retreat, with big names down 5% including China Resources Land (1109.HK), Evergrande (3333.HK), Shimao Property (0813.HK), Agile Property (3383.HK), KWG Property (1813.HK) etc.

"The central government is not letting go of its tightening policy on the property sector," as evidenced by Foshan's policy U-turn on easing measures earlier this week, says Daniel So, an analyst at SHK Financial.

For investors looking to buy stocks on the potential market retreat, So prefers equally high-beta China cement stocks such as Anhui Conch Cement (0914.HK) and China National Building Material (3323.HK).

Conch is down 3.3% at HK$25.30, and CNBM falls 6.0% to HK$8.60.

Source: Dow Jones Newswire

[winston]

vested in Anhui & CNBM

DJ MARKET TALK:JPM Tips M&A To Be China Cement Sector Invest Theme

1106 [Dow Jones] JPMorgan expects the investment theme in the China cement sector to be led by M&A next year vs supplier discipline in 1H11 and credit tightening in 3Q11 which has had a profound impact on cement demand - "it is not cement companies but their customers that have no cash."

This also led to postponed infrastructure projects, but will help accelerate M&A activity in 2012.

The house says Beijing's announcement earlier this week on loosening credit for SMEs, and offering CNY200 billion funding for Ministry of Railway will be read positively, even though a broader-based credit easing is unlikely to occur anytime soon;

It recommends investors buy industry leaders such as Anhui Conch Cement (0914.HK) / China National Building Material (3323.HK). Conch is down 3.4% at HK$25.25, CNBM falls 5.1% to HK$8.68.


Source: Dow Jones Newswire

[winston]

vested again in Anhui & CNBM

DJ MARKET TALK: China Cement Stocks Fall;Property De-Stock A Concern

1030 [Dow Jones] China cement stocks succumb to heavy profit-taking, with leader Anhui Conch Cement (0914.HK) tumbling 8.2% to HK$24.65, and China National Building Material (3323.HK) falling 8.0% at HK$8.80, but such fall only serves to highlight the sector's high-beta nature, with CNBM at Monday's close rallying a breath-taking 73.5% from its recent trough of HK$5.51 hit Oct. 4.

Fundamentally, UBS believes that investors have already factored in a very bearish scenario for the cement industry outlook and the sector "has already largely bottomed."

It adds, the sector could rebound further in 4Q11, but the risk of property de-stocking might be the last concern preventing the sector from turning around.

China Resources Cement (1313.HK) is off 7.7% at HK$5.36, Shanshui Cement (0691.HK) falls 8.2% to HK$5.58.


Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: China Cement Names Likely Succumb To Profit-Taking Oct 18, 2011

0859 [Dow Jones] There will likely be a perfect storm for high-beta China cement stocks to succumb to profit-taking, amid the likely broad market pullback today.

China National Building Material (3323.HK) epitomizes the sector's high-beta, rallying 11.2% to end Monday at HK$9.56, representing a breath-taking 73.5% rally from its recent trough of HK$5.51 hit Oct. 4.

After the short-covering-driven rally, investors are likely to re-focus on industry fundamentals;

Credit Suisse says cement prices in China have been weakening in most regions over the past few weeks, despite it being peak season--"a reflection of softening demand."

It adds, volunteered production cut has helped reduce the fall in cement prices, "yet it does not make the margin immune to the cycle."

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: China Cement Cos Weakness Will Be L/T Buy Chance-UBS

1400 [Dow Jones] The recent rebound in China cement stocks is "largely policy driven," says UBS;

Looking forward, the policy could remain positive for the sector but some property restocking concerns still remain.

"We believe 4Q11 could see cement stocks rising further with the policy support, but a correction could also follow when property-related data deteriorate."

The house keeps its positive sector view from a 12-month perspective but also highlights the risk of stock corrections due to property investment deceleration.

"We suggest investors look for attractive investment opportunities should share prices weaken;"

Its top picks are Anhui Conch Cement (0914.HK) and Shanshui Cement (0691.HK). Conch is up 1.7% at HK$29.20, Shanshui rises 3.0% to HK$6.77.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: China Cement Stocks To Outperform In 2H12 - UBS

1530 [Dow Jones] UBS keeps its long term positive view on China's cement sector and expects cement stocks to outperform in 2H12;

"The improving policy environment should prevent the sector from a big pullback."

However, it recommends investors be patient, as a better entry point could come in next 1Q when cement demand and price should have bottomed.

It says policy and fundamentals are the two key drivers for cement stocks. Recently, with the gradual and moderate easing of macro policies, it believes cement stocks could rebound, though stock prices could stay volatile as fundamentals have not yet turned around.

China Resources Cement (1313.HK) is up 2.1% at HK$6.26 and Anhui Conch (0914.HK) is up 4.6% at HK$27.50.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: Cement Demand Growth To Slow In China Next Year-Daiwa

0843 [Dow Jones] With China's credit environment remaining tight, Daiwa tips China cement demand growth to slow to 7% on-year for 2012 from 11% on-year in 2011.

"We expect investment in water resources to take over from railways, as the new engine for demand growth in infrastructure, while demand growth from the rural areas will remain."

The house has cut its sector EPS forecasts, averaging 7% for 2011, 24% for 2012, and 27% for 2013.

Given the current valuations, and with an eye on the 2008 experience, the house remains positive on the cement sector overall, as it believes values have emerged for the sector.

Its preferred picks are China Resources Cement (1313.HK) given that its earnings growth for 2011-2013 is faster than its peers, and China Shanshui Cement (0691.HK) for its high dividend yield.

CR Cement ended down 1.0% at HK$6.00 Thursday and Shanshui gained 1.7% to HK$5.99.

Source: Dow Jones Newswire