In June, cement production was 163.97 million tons, a year-on-year decrease of 10.7%, and the total cement production from January to June was 850.47 million tons, a year-on-year decrease of 10%.
According to Zhixin Financial APP, Guosen Securities released a research report stating that in June, cement production was 163.97 million tons, a year-on-year decrease of 10.7%, and the total cement production from January to June was 850.47 million tons, a year-on-year decrease of 10%. In terms of prices, the price increase in Northeast and East China drove up national cement prices, while the region with falling prices was mainly due to a significant decline in short-term demand, high inventory levels, and insufficient corporate confidence, leading to a price correction after the increase, and it is expected that price fluctuations will remain the main trend in the later period. Recently, real estate policies have continued to land, and market sentiment has slightly improved. The fundamentals are relatively low compared to the valuation. This round of real estate policies has a decisive attitude, and there is still room for subsequent support policies to be added. We should continue to focus on the landing effect of policies and the repair of expectations. We will focus on high-quality building materials leading companies and some oversold stocks.
Guosen Securities' main points are as follows:
The total social financing in June was slightly better than expected, and fixed asset investment and commodity housing sales slightly rebounded that month.
On July 12th, the central bank released financial data for June. At the end of June, the balance of broad money (M2) was RMB 305.02 trillion, a year-on-year increase of 6.2%, and the scale of social financing was RMB 395.11 trillion, a year-on-year increase of 8.1%. Overall, government financing in June continued to contribute to supporting the improvement of social finance month-on-month. On July 15th, the Bureau of Statistics released investment data, and fixed asset investment (excluding farmers) from January to June was RMB 24.5391 trillion, a year-on-year increase of 3.9%. Among them, narrow infrastructure investment increased by 5.4%, manufacturing investment increased by 9.5%, and real estate development investment decreased by 10.1%. Monthly investment rebounded. In June, cement production was 163.97 million tons, a year-on-year decrease of 10.7%, and the total cement production from January to June was 850.47 million tons, a year-on-year decrease of 10%.
Key sector data tracking: cement prices rose month-on-month, float glass prices continued to fall, and coarse yarn prices fell slightly.
1) Cement: This week, the average price of national P.O42.5 high-standard cement was 393.0 yuan/ton, a week-on-week increase of 0.94%, a year-on-year increase of 5.03%, and the ratio of inventory to capacity was 67.8%. It increased by 10.1% month-on-month and decreased by 8.4% year-on-year. In early July, affected by heavy rainfall, downstream demand in most areas was weak, and the average cement shipment rate in key areas across the country decreased by 1 percentage point compared to the previous month. In terms of prices, the price increase in Northeast and East China drove up national cement prices, while the region with falling prices was mainly due to a significant decline in short-term demand, high inventory levels, and insufficient corporate confidence, leading to a price correction after the increase, and it is expected that price fluctuations will remain the main trend in the later period.
2) Glass: The market price of float glass continued to decline, and the supply and demand contradiction intensified. The average spot market price of glass this week was 1578.6 yuan/ton, a week-on-week decrease of 2.03%. The inventory in key provinces increased by 2.25% to 56.47 million weight boxes. The overall transaction of photovoltaic glass was average, and the inventory increased slowly. The mainstream order price of 2.0mm coated panels this week was 15-15.5 yuan/square meter, which was flat month-on-month, and the mainstream order price of 3.2mm coated panels was 24-24.5 yuan/square meter, which was flat month-on-month. The inventory turnover days were about 31.09 days, a month-on-month increase of 3.08%.
3) Fiberglass: The downstream pickup of alkali-free coarse yarn is still cautious under weak supply and demand. Under weak short-term supply and demand, prices are under pressure. The mainstream quotation for 2400tex alkali-free direct-roving this week is RMB 3,600-3,800 (RMB 3,600-3,900 last week) per ton. The national average price is RMB 3,697.0 (RMB 3,707.33 last week) per ton, a month-on-month decrease of 0.28%. The price of electronic yarn rose and stabilized for the time being, and new prices are landing one after another. The short-term supply is still tight this week. The mainstream quotation for electronic yarn G75 is RMB 8,900-9,300/ton, and the price of electronic cloth is 3.9-4.1 yuan/meter, which was flat month-on-month.
Investment suggestion: At present, the pressure of real estate influence still exists, and the building materials sector as a whole is still in a slow recovery phase at the bottom. With further release of risks, the bottom continues to consolidate, and high-quality companies continue to lead, showing strong operational resilience and improving operating quality. With the optimization of the expansion of channel change, product categories and regional layout, competitive advantages are expected to continue to highlight, and supply clearance will further optimize the pattern. The concentration of benefits in the medium and long term will continue to increase. Recently, real estate policies have continued to land, and market sentiment has slightly improved. The fundamentals are relatively low compared to the valuation. This round of real estate policies has a decisive attitude, and there is still room for subsequent support policies to be added. We should continue to focus on the landing effect of policies and the repair of expectations. We will focus on high-quality building materials leading companies and some oversold stocks.
Individual stock investment opportunities: it is recommended to focus on Kinlong Hardware (002791.SZ), Skshu Paint (603737.SH), Beijing New Building Materials (000786.SZ), and Beijing Oriental Yuhong Waterproof Technology (002271.SZ), and other cyclical building materials stocks that are expected to improve profits at the bottom. Recommended conch cement (600585.SH), huaxin cement (600801.SH), China Jushi Co., Ltd. (600176.SH), and other subdivided areas watching the leading companies such as Ocean's King Lighting Science & Technology (002724.SZ), and Honglu Steel Structure (002541.SZ).
Risk Warning: Policy implementation is lower than expected; cost increases exceed expectations; supply exceeds expectations.