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国联证券:24Q3水泥“淡季不淡” 价格中枢或持续提升

Guolian Securities: Cement "off-season not light" in 24Q3, price center may continue to rise

Zhitong Finance ·  Nov 11 13:44

In 2024Q3, cement spikes continued to increase in most regions, the supply and demand situation in the industry improved marginally, and cement prices continued to rise slightly. There was a certain characteristic of “not poor in the off-season”, and industry profits improved year-on-month.

The Zhitong Finance App learned that Guolian Securities released a research report saying that against the backdrop of profit pressure in the 2024H1 industry continuing to increase markedly year-on-year, cement spikes continued to increase in most regions in 2024Q3, the supply and demand situation in the industry improved marginally, and cement prices continued to rise slightly. There was a certain “not light off season” characteristic, and industry profits improved year on month. Currently, the cement industry may be in a historically low profit region, and the valuations of major cement companies are also at the bottom of history. It is recommended to pay more attention to positive changes in various aspects of policy/industry/enterprise. In terms of targets, it is recommended to focus on cement leaders with scale advantages and technical advantages with regional market leadership, especially those representing central state-owned enterprises.

The main views of Guolian Securities are as follows:

Cuofeng strengthens cement Q3 “not light in the off-season”, with Northeast China as the benchmark

Against the backdrop of the 2024H1 industry's profit pressure continuing to increase markedly year-on-year, cement spikes continued to increase in most regions in 2024Q3, the supply and demand situation in the industry improved marginally, and cement prices continued to rise slightly. There was a certain “off-season not weak” characteristic, and industry profits improved year on month. The average price of a single ton of cement in 2024Q3 was 390 yuan, yoy+22 yuan/ +6%, qoq+15 yuan/ +4%; the average price difference of cement and coal was 319 yuan, yoy+24 yuan/ +8%, and qoq +15 yuan/ +5%. In the subregion, Cuofeng kiln shutdown was significantly better than the national average in 2024Q3, and the intensity of Cuofeng kiln shutdown increased significantly year-on-year, leading the increase in cement prices.

The year-on-year decline in the sample companies' 2024Q3 revenue and net profit to mother narrowed

Guolian Securities said that by using 17 listed cement and cement chain companies as an observation sample, the revenue of the sample companies in 2024Q1-3 was 218.9 billion yuan, yoy -22%; net profit to mother was 3.58 billion yuan, yoy -72%; of these, 2024Q3 revenue was 76.6 billion yuan, yoy -20%; net profit to mother was 3.12 billion yuan, yoy -16%. Overall, with the obvious strengthening of collaboration in the cement industry, the operating pressure on major cement companies eased marginally in 2024Q3. The year-on-year decline in revenue and net profit to mother was narrower than in 2024Q2, and off-season profits increased somewhat month-on-month. Among the 17 sample companies, the number of companies with positive net profit to mother in a single quarter in 2024Q1-Q3 was 8, 13, and 13, respectively.

2024Q1-3 cement companies' capital expenditure decreased, and the net cash flow scale declined

The overall capital expenditure of the sample cement companies in 2024Q1-3 was 19.5 billion yuan, or -3 billion yuan year on year. The sample cement companies' capital expenditure decreased a lot year over year, partly to expand new business/new markets. Small and medium-sized enterprises were mainly used for capacity replacement and technology reform optimization. Most sample cement companies' 2024Q1-3 operating cash flow decreased by 0-0.7 billion yuan year-on-year; among them, Hailuo Cement's 2024Q1-3 net cash flow was 10.3 billion yuan, yoy +0.7 billion yuan/ +7%, and the net inflow scale bucked the trend and expanded to provide strong support for its business development; Tianshan Co., Ltd.'s net cash flow from 2024Q1-3 operating activities was 3.4 billion yuan, yoy-7.7 billion yuan/ -70%, mainly due to the revenue ratio Caused by a decrease.

Investment advice: cement profit valuation is in the bottom area. It is recommended to focus on cement faucets

It is recommended to focus on further strengthening policies including regulating the construction of production capacity/carbon trading markets in the cement industry. Currently, the cement industry may be in a historically low profit region, and the valuations of major cement companies are also at the bottom of history. It is recommended to pay more attention to positive changes in various aspects of policy/industry/enterprise. Policy recommendations focus on follow-up related content to support continuous supply clearance; the industry level focuses on enterprise regional collaboration, industry andmergers and acquisitionsOptimizing the supply pattern, etc.; enterprises pay attention to new business/overseas layout developments and important incremental contributions. It is recommended to focus on cement leaders with scale advantages and technological advantages with regional market leadership, especially those representing central state-owned enterprises.

Risk warning: The risk of rising material prices, the risk of credit risk spreading among housing enterprises, market competition intensifies the risk, and the intensity of kiln shutdown at false peaks falls short of expectations.

The translation is provided by third-party software.


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