NEWS CENTER

China's cement stocks or out of the second wave of rising trend


Release time:

Sep 13,2013

Inspired by the continued improvement of macroeconomic data, cement stocks performed strongly again on September 11, ranking first in the industry sectors of the two cities. Industry insiders believe that under the expectation that new real estate construction continues to pick up and excess capacity is further digested, cement stocks not only have less downside risk, but are also expected to come out of the second wave of the market. As of yesterday's close, the cement building materials sector as a whole rose 2.18. Among them, Qinling cement strong rise and stop, Sinoma International rose 5.25 percent, Sichuan Jinding rose 5.2 percent, ST Chenglin rose and stopped, Jinyu shares, Yanlianshan, Yandong cement rose more than 4 percent. Judging from the flow of funds, yesterday's water

Inspired by the continued improvement of macroeconomic data, cement stocks performed strongly again on September 11, ranking first in the industry sectors of the two cities. Industry insiders believe that under the expectation that new real estate construction continues to pick up and excess capacity is further digested, cement stocks not only have less downside risk, but are also expected to come out of the second wave of the market.

As of yesterday's close, the cement building materials sector as a whole rose 2.18. Among them, Qinling cement strong rise and stop, Sinoma International rose 5.25 percent, Sichuan Jinding rose 5.2 percent, ST Chenglin rose and stopped, Jinyu shares, Yanlianshan, Yandong cement rose more than 4 percent. Judging from the flow of funds, there was a net inflow of 0.238 billion yuan of main funds in the cement and building materials sector yesterday. Among them, Conch Cement, Qinling Cement and Sinoma International became the three most popular stocks in the sector.

From the news side, some media reported that the national development and Reform Commission has given the green light for the transformation of shantytowns in the mainland, relaxed the upper limit of bond financing ratio of shantytowns transformation projects to 70%, and for the first time explicitly encouraged enterprises to issue special bonds of "debt loan portfolio" for the construction of shantytowns transformation projects. As the shantytown renovation will use a large number of cement building materials, it will have a positive impact on cement stocks.

From the perspective of the fundamentals of the cement industry, the peak season effect of the industry will gradually appear. Bao Yanxin, an analyst at Guotai Junan, believes that there is a possibility of a second wave of rise in cement stocks in the future, which mainly comes from two aspects: first, the rise of cement prices in East China, and second, the improvement of macroeconomic data, which continues to strengthen the expectation of economic rebound.

"The delivery situation of leading enterprises we tracked shows that the cement industry has recovered rapidly, but the current storage location is not high. For example, Hefei is currently 65%, compared with 80% in the same period last year." Bao Yanxin predicted that "after entering the middle of September, there is a high probability that cement prices in East China will rise again, and the macro data will strengthen the expectation of economic rebound, which is more favorable to cement stocks in the early cycle than the midstream industries such as construction machinery."

Changjiang Securities analyst Fan Chao also said that in the future, in the economic downturn channel, it may continue to see a gradual decline in stabilization. "Before the September economic data is not released, the probability of rising cement prices is greater." Fan Chao noted that "the reasons for the cement industry's price increases in the first and third quarters will continue in the fourth quarter; and demand is unlikely to decline in the fourth quarter from the previous quarter. As a result, there are still trading opportunities for cement, and investors are advised to hold them or even add positions on dips."