Cement Producers

[winston]

not vested

DJ MARKET TALK: China Cement Stocks Down; Reduce Sector Exposure-KGI

1013 [Dow Jones] China cement stocks succumb to profit-taking, but the pullback is modest relative to their recent rally.

Sector leader Anhui Conch Cement (0914.HK) is down 2.1% at HK$27.60 but is still +19.7% year-to-date;

China National Building Material (3323.HK) slides 2.5% to HK$9.84.

KGI says cement price started to decline in 3Q11, and since 1Q is a traditional low season, it expects cement price to remain depressed in the near term.

It adds, the central government does not have a plan to accelerate its fixed asset investment, hence cement demand is unlikely to see substantial growth.

KGI says Conch is trading at 10.5X FY11 P/E, unattractive given its flat earnings outlook.

"We suggest investors to reduce exposure on the sector during the current strength."


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: China Cement Plays 2013 Recovery Not In Price Yet - DB

0906 [Dow Jones] Deutsche Bank expects 2012 to see a cyclical decline in average selling prices and sector earnings for China's cement industry followed by a recovery in 2013, driven by economic recovery and constrained supply, but notes "the cyclical downturn looks priced in, but the 2013 recovery not."

DB says sector names are cyclically cheap, with many trading at the lower end of their P/E and P/B ranges, and believes the sector will start to price in recovery by 2H12 and trading multiples should rise.

Its top picks are - based on where there is less ASP downside risk as well as ASP upside risk - Shanshui Cement (0691.HK) and China Resources Cement (1313.HK); of the big caps, it prefers China National Building Material (3323.HK) over Anhui Conch Cement (0914.HK).

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: 15%-50% In Large Cap China Cement Names - CS

1526 [Dow Jones] Credit Suisse says that Chinese cement stocks rose strongly in recent weeks, in particular due to reinitiated support to first-time homebuyers from government's policy.

But it remains concerned on the growth of construction demand, and views the risk reward of the sector valuation has turned negative following the recent runs.

CS says its concern on cement/commodity demand is driven by the overconstruction activity and destocking in the property sector, rather than issues with property demand.

CS believes seasonal cement price hike will remain difficult in 2Q12, which could lead to a potential 15%-50% downside on large cap names from here.

"We suggest profit-taking on the sector."

China National Building Material (3323.HK) is down 4.0% at HK$10.02.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Cement Stocks Up But MS Says Take Profits

1450 [Dow Jones] China cement stocks continue their recent strength, mostly tracking the outperformance of mainland developers, as a potential revival in the physical property market would be beneficial to cement demand.

Anhui Conch Cement (0914.HK) is +1.6% at HK$27.90, while China National Building Material (3323.HK) gains 1.1% to HK$11.10.

Still, Morgan Stanley suggests taking profits after the sector's about 60% rally from its 52-week low.

"Takeaways from our recent cement trip confirm that demand remains sluggish. We see downside risk to pricing as new capacity additions from the west may hit pricing coordination in eastern China."

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: Market Too Bearish On China Cement Sector - Macq

1055 [Dow Jones] Macquarie thinks that share prices of China cement firms are already factoring in a 15%-20% on-year drop in cement prices this year, which implies no steep price drop but also no recovery for the rest of the year.

"We think that is too bearish as we still expect prices to recover into the back end of September."

So far this year, Macquarie estimates that East and South China players' cement prices have corrected 11%-16% vs the 2011 average; it adds that the best-performing regions have been Northeast China (up 11% vs the 2011 average price) and North China (down 3% vs 2011), and the key players in those regions are Shanshui Cement (0691.HK) and BBMG (2009.HK).

The sector names under Macquarie's coverage are all rated Outperform. Leader Anhui Conch Cement (0914.HK) is down 0.9% at HK$22.90.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: 1Q Trough Of Cycle For China Cement Sector - UBS

1053 [Dow Jones] UBS notes that Chinese Premier Wen said earlier this month that Chinese authorities will bring out prompt pre-adjustments and fine-tuning on current policies according to the changing situation, and one of the priorities is to ensure sufficient funds, to continue the construction of unfinished projects, especially the country's key projects.

"We expect the acceleration of key projects could further support the cement demand."

UBS keeps its view that 1Q12 "would be the trough of the cycle" for China's cement sector and it suggests that investors buy especially when the sales volume has already recovered and a price increase may be forthcoming.

China National Building Material (3323.HK) is up 1.7% at HK$10.66, again bucking the broad market trend; the stock is now +16.8% over six sessions post-results.


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Macquarie Upbeat On China Cement Plays; CNBM Key Pick

1120 [Dow Jones] Macquarie says its April survey of 65 cement, downstream concrete and property companies reveals the sequential pick up in March continues in April.

It expects muted 1Q results for most of the Chinese cement producers because of a higher base and extended production cuts, coupled with an earlier Chinese New Year and unseasonal rain.

"We see potential weaknesses from 1Q results as a buying opportunity and we like the sector due to its supply side improvement and cheap relative valuation," Macquarie says and its key pick remains China National Building Material (3323.HK).

Sector leader Anhui Conch Cement (0914.HK) is up 1.4% at HK$25.55, despite reporting its 1Q net profit dropped 44% on year to CNY1.25 billion; CNBM is up 0.8% at HK$10.46.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: Risk To China Cement Stocks More On Upside - UBS

0859 [Dow Jones] UBS says that last week, cement prices in most regions of China remained flat and cement inventory levels fell in many regions due to better sales.

The house says it's not expecting cement industry fundamentals to turn around materially in the short term, but the macro economic recovery and policy easing should remain the key positive drivers for the sector.

UBS reiterates its positive view on the sector, believing the cement industry has returned to an upward trend in 2Q12 and "the risk to cement stocks is more on the upside."

Anhui Conch Cement (0914.HK) ended Monday down 1.0% at HK$25.80, China National Building Material (3323.HK) fell 1.9% to HK$10.26.

Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: China Cement Sector Remains Unattractive - CS

1108 [Dow Jones] Credit Suisse notes most cement companies reported 30%-40% on-year earnings declines for 1Q12, including the most recently reported China National Building Material's (3323.HK) 1Q net profit of CNY601 million, down 46% on-year.

The house says that "while the market may be willing to look beyond, the reality is price hikes remained absent in most regions as of end-April."

It expects cement demand to remain lackluster in 2H12, on moderate infrastructure pickup combined with weak demand from property construction.

CS estimates that among sector names, large caps are trading at 0%-40% above their long-term fair value, while mid-caps are fair or have 20%-30% potential upside; "risk-reward remains unattractive for the sector."

CNBM is down 0.8% at HK$10.40.


Source: Dow Jones Newswire

[winston]

not vested

DJ MARKET TALK: China Cement Stocks Fall On Demand Worries
May 04, 2012

0637 GMT [Dow Jones] Chinese cement makers drop on worries about demand.

"The second quarter is the peak season for sales of cement products. But cement prices lack upward momentum," due to lackluster demand, HuaChuang Securities analyst Li Long says in a research note.

However, Li says he is still optimistic about the sector given that infrastructure investments this year may be higher than last year.

Among his stock recommendations is Anhui Conch, a low-risk blue-chip.

Source: Dow Jones Newswire