Gelonghui, April 6 丨According to the Jefferies Research Report, it is expected that leading companies in the mainland cement industry may not have a price war this year, but there is an opportunity for mergers and acquisitions. The bank estimates that cement companies' profitability may rebound moderately this year, but the outlook for this year and beyond is still a downward pressure. The bank did not “buy” China Building Materials (3323.HK), and the target price was lowered from HK$9.61 to HK$8.44; it gave Western Cement (2233.HK) a “buy” rating. The target price was raised from HK$0.95 to HK$1.89; the target price was raised from HK$0.95 to HK$1.89; and the target price was raised from HK$21.08 to HK$24.92. Tianshan Cement (000877.SZ) and China Resources Cement (1313.HK) have “outperformed the market” ratings.

Furui mentioned that leading companies are unwilling to buy assets from impoverished regions such as the southwest, and cement companies are unwilling to sell high-quality assets from high-quality regions such as Guangdong. Currently, a draft plan to use carbon trading to limit industry emissions is ready to be submitted to the central government within 3 to 6 months after industry-wide discussions in April. It is expected that the approval process may take months or years. Under this system, small factories that have less advanced production lines and are therefore energy- or carbon-intensive will incur additional costs on carbon quotas, making them uncompetitive and then phased out. Therefore, leading companies are in no hurry to carry out mergers and acquisitions. However, the bank believes that cement's profitability will still be limited until the market share of leading producers increases.