Cement Producers

[winston]

DJ MARKET TALK: China Cement Plays Up; Subsidy Beneficiaries -JPM

1015 [Dow Jones] HK-listed China cement plays mostly higher, extending big sector rally on "building materials to countryside" theme. JPMorgan estimates initial volume to benefit from rural subsidy policy "would be somewhat limited," around 2% upside per annum in 2011-2013, but total additional consumption triggered by subsidy "cannot be underestimated," as result of multiplier effect, namely, additional cement demand would be driven by not only rural subsidy on housing, but also subsequent need to rebuild or modernize relevant infrastructure in rural areas.

House believes companies having exposure to rural areas would directly benefit from measure, including China National Building Material (3323.HK), Anhui Conch Cement (0914.HK); estimates for every 1% increase in sales volume, both companies' bottom line would increase in similar manner.

Conch +1.6% at HK$47.75, adding to 9.3% jump yesterday; CNBM +1.3% at HK$14.56, China Resources Cement (1313.HK) +4.1% at HK$3.53.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: Cement In China To Resume Growth After 1Q -ICBCI

1202 [Dow Jones] ICBC International tips China market demand for cement would resume growth after end of slack 1Q10 period, which should improve cement producers' selling price and sales volume. Overhang from snowstorm should also be largely removed. "We expect the above catalysts would help cement peers to perform well in short-term."

House likes Anhui Conch (0914.HK) and China National Building Material (3323.HK) for their larger exposure to regions benefiting from faster urbanization, while China Shanshui (0691.HK) should benefit more from expected aggressive elimination of outdated capacities at Shandong province. AC down 0.2% at HK$49.70, CNBM +1.7% at HK$14.38, Shanshui +0.4% at HK$4.64.(SUT)

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: China Cement Prices Stronger Than Usual IN 1Q-UBS

1506 [Dow Jones] Stronger-than-usual China cement prices in 1Q suggests demand this year likely relatively good, says UBS. Notes cement prices remain resilient in most regions around Chinese New Year; most importantly, this reflects government control over new capacity additions and industry consolidation are having a better effect in market.

Adds, with further recovery of demand, cement prices could have a wider range and larger scale hikes over next 2-3 weeks. House recommends Anhui Conch (0914.HK), China National Building Material (3323.HK) for their exposure to eastern, southern China, in which it has best cement price momentum.

Anhui Conch last +2.2% at HK$50.50, CNBM +1.9% at HK$14.74

Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: GS Turns More Positive On China Cement Sector

0939 [Dow Jones] Goldman Sachs previously viewed China cement sector more conservatively due to potential margin contraction risk, assuming cement producers unable to pass on rising raw material prices amid oversupply.

But house now turning more positive as expects better supply/demand balance to lead to more sustainable cement prices;

'We see more sustainable cement prices for regions with higher industry concentration rates and believe industry leaders with solid financials in each region could benefit from a future consolidation trend.'

Tips Anhui Conch (0914.HK) as best meeting these criteria, upgrades to Buy vs Sell, target to HK$41.00 vs HK$18.50; stock ended +1.2% at HK$30.55 Thursday.

( Big change in TP. Was somebody sleeping or is it too optimistic ? )


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: China Cement Cos Power Cut Concerns Overdone -UBS

1558 [Dow Jones] Impact of power restrictions on China cement producers is not big, and street is "overly concerned," says UBS.

Notes, July, August relatively low season for cement consumption, capacity utilisation rate not very high even in normal year, "as a result, the electricity cut in the low season would not have very big impact on the production volume of key players," will also help prevent piling up of inventory.

Says smaller players will be more affected. House comments follow China's recent move to cut power to meet emission targets.

Top picks are China National Building Material (3323.HK), Anhui Conch (0914.HK) due to their cheap valuation, potential for earnings to beat market consensus.

Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: CNBM, Sinoma Remain UOB's Top Cement Sector Picks

0858 [Dow Jones] UOB KayHian says China's fixed asset investment growth trend confirmed house's previous expectation cement industry's upcycle will kick in due to constrained supply, better industry dynamics.

Says China likely to continue with tight policies on supply side, which will ensure better industry dynamics. "We will consider upgrading the sector if the two key indicators we track, cement FAI growth and new floor space started, continue to show positive signs next month."

China National Building Material (3323.HK), Sinoma (1893.HK) remain house's top sector picks; both rated Buy, targets at HK$22.33, HK$8.96 respectively.

CNBM ends down 1.7% at HK$17.02 Friday, Sinoma down 1.1% at HK$6.28.


Source: Dow Jones Newswire

[winston]

*DJ China Ministry: To Eliminate 91.55M Tons Of Concrete Capacity This Year
Not vested

[winston]

Not vested

DJ MARKET TALK: Time Is Ripe For Buying China Cement Stocks - UOB

0944 [Dow Jones] China's affordable housing is expected to drive about 30% of cement consumption in the property sector, which is likely to compensate for any investment slowdown in the private property market, says UOB KayHian.

Adds, the Chinese government set a target for 10 million economic housing units to be constructed next year, a 72.4% increase vs 2010's target of 5.8 million units.

House says a 5.0%-10% stock correction in the past month suggests "the time is ripe for buying cement stocks;" keeps its Overweight call on the sector.

Also says, with first-tier producers leading industry development, it believes that second-tier producers are set to outperform on M&A projects and volume growth.

Source: Dow Jones Newswire

[winston]

Chinese Cement

vested in CNBM

DJ MARKET TALK: China Cement Prices Could Rise Further - UBS

1602 [Dow Jones] UBS says cement supply in east China is constrained due to government control over new capacity additions and more rapid closures of obsolete capacity.

Says, based on the flow of cement shipments along the Yangtze River and cement consumption seasonality, house expects good cement demand growth (high single-digits) in Eastern China over the next two years.

The house says cement prices have increased more than 60% since August, much more than house expected.

"Given we expect further improvement in the supply-demand dynamics as well as synergy from market consolidation, we think cement prices could rise further in 2011 and 2012."

UBS tips its top picks as China National Building (3323.HK) and Anhui Conch (0914.HK).


Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: UOB Keeps Positive View On China Cement Sector

1539 [Dow Jones] UOB KayHian stays positive on China's cement sector and it continues to prefer the eastern and southern regions on tight regional dynamics and sustainable demand growth.

The house says sector catalysts include industry M&A wave in 1H11 to trigger re-rating opportunities; sector's 4Q10 earnings are likely to be significantly above market expectation due to:-
1) record-high cement prices nationwide;
2) declining cement FAI growth with confirmed capacity capped by the government;
3) likely higher-than-expected 1Q11 cement selling prices;
4) detailed policies on "building materials to rural areas"; and
5) rural policies on the construction of water conservancy projects.

UOB keeps Buy calls on China Resources Cement (1313.HK), CNBM (3323.HK), Sinoma (1893.HK) and Anhui Conch (0914.HK), which "are all well positioned for a rebound."

Source: Dow Jones Newswire