Investment advice: the cycle creates new opportunities, growth still remains to be seenconsumptionBuilding materials and new materials
The national cement price rose by 3 yuan/ton this week. The increase was mainly driven by price increases in the Beijing-Tianjin-Hebei region and the Guanzhong region of Shaanxi. Prices in Beijing-Tianjin-Hebei increased by 30-40 yuan/ton, and Guanzhong in Shaanxi increased by 20 yuan/ton. At the end of July, although demand was still in the middle of the low season, some regions have already begun a restorative increase in prices. Judging from the tracking situation, in most regions where prices have risen, supply has been shrunk, and enterprises are mainly actively pushing up. Markets in the Beijing-Tianjin-Hebei and Guanzhong regions are relatively closed. Even if prices are restorative, the impact of external cement is limited. It is also learned that in August, provinces such as Henan, Hubei, Heijiliao, and Ganqing will also push prices up one after another; demand for cement is still weak due to hot weather in the Yangtze River Delta. Clinker prices may rise restoratively, and cement prices will remain stable in the short term.
Cement maintains an earlier view and appropriately allocates East China cement stocks with lower PB and Beijing-Tianjin-Hebei cement, which appeared at an inflection point. There are two reasons: first, short-term prices are expected to bottom out and usher in a recovery (concentrated release of demand due to better weather + early warm-up and price increases for enterprises handing over the off-peak season); second, medium-term expectations may improve (repair of demand-side expectations due to infrastructure implementation and possible progress in supply-side cement reforms, such as capacity swaps). Target choices:Conch cement,Huaxin cement,Jidong cement. Furthermore, it is recommended that due attention be paid to glass leaders whose fundamentals continue to rise while the stock price is still at the bottom of historyKibing Group.
In terms of other building materials, the three main lines of continuing to consume building materials, new materials, and transformation are recommended: 1) Consumer building materials will be promoted againBunniesWe believe it is the best standard for consumer building materials, because the market space is large enough, the market share is low enough, the expansion speed is fast enough, and the channel advantage is strong enough, so we can continue to pay attentionOriental YuhongundWeixing New Materials; 2) New material recommendationsSinoma Technology,Changhai Co., Ltd.,Reinvigorate technology; 3) Recommended transformation stocksJinyuan Co., Ltd.:Qinghai cement business is booming, building a safety margin and transforming hazardous waste disposal to open up new growth space.
Market performance
building materials - 3.4%,Shanghai-Shenzhen 300Index -0.7%. The top three ST Lions rose 14.0%,Kaier New Materials12.0%,Yaopi glass8.7%; last threeDow's Technology18.5%, Shentiandi A 11.1%,Jiuding New Materials10.5%
Cement: The national average price was 281.29 yuan/ton, up 2.90 yuan/ton from the previous month, and 9.52 yuan/ton. Glass: The average price of floating glass this week was 65.76 yuan/weight box, and the ring rose 0.48 yuan/weight box. Glass fiber and others: 2400tex wound direct yarn left the factory about 5280 yuan/ton.
IMPORTANT INFORMATION
1. In the first half of the year, China exported 6.12 million tons of cement clinker, an increase of 118% over the previous year; the total export volume was 180 millionUSD, a year-on-year increase of 63%. 2. In the first half of 2016, cement production grew by 3.2%, and flat glass production grew by 1%. In the first five months, companies in the cement and flat glass industry lost more than 40% and 30%, respectively. 3. The Development and Reform Commission approved Guizhou to establish a 300 billion yuan Poverty Alleviation Fund, which is mainly invested in eight fields including transportation and water conservancy, and initially plans to invest 80 billion yuan in transportation infrastructure construction.