Building materials industry report: off-season, medium-term good

Cement industry: The average price of the national cement market continued to fall this week, down 0.5% from the previous month. The prices in some areas of Shanghai, Fujian and Zhejiang were lowered by 10-30 yuan/ton, and the prices of clinker in Guangdong Pearl River Delta were down by 30 yuan/ton. 70%, up 1.04% from the previous month, and Hebei, Jiangsu, Zhejiang, Anhui, Fujian, Hubei and Guangdong and Guangxi regions rebounded. The coal price of transit coal fell by RMB 5/ton; the price difference of cement and coal decreased by RMB 1.8/ton from the previous month.

Glass industry: The price reduction in North China, Northwest China and South China was about 1.5-4 yuan/heavy box; no new production line was put into production, and 3 production lines were changed from ignition to production; production stopped at the same level as the previous month and remained at the lowest level in the year; It has risen for two consecutive months, and this time it increased by 320,000 heavy boxes. The price difference of soda ash in heavy oil in North China and South China decreased by RMB 3/heavy box.

Other building materials industry: ethylene oxide, zircon sand, acrylic acid prices fell.

Maintain industry “hold” rating:

We started to turn positive towards the industry from mid-November, and there are three reasons for our change of opinion: First, from the industry situation in November-December, we can judge that the off-season correction in the first quarter of next year is unlikely to return to the previous low. Second, macro data shows that the industry's follow-up demand will pick up, especially real estate data (historically, although real estate accounts for only 30% of cement demand, but the determinant of marginal change); the third is that the market continues to fall and The price of cement in the off-season has been adjusted, and the market's expectations have turned pessimistic.

It is expected that the supply and demand of the cement industry will be improved in the next 2-3 quarters: demand improvement, supply improvement in the eastern region, large enterprises are expected to shift from price wars to maintaining cement prices; the bottom of the glass industry has been seen, but the current industry inventory and new Supply is still large, and price improvement flexibility is limited.

At present, we are still optimistic about cement lead in the eastern region (Jidong Cement, Jinluo, Conch Cement, Huaxin Cement), other companies are optimistic about Jianye Group and CSG A; main reasons: based on the next 2-3 quarters of the industry Demand will pick up (real estate investment and infrastructure investment), and based on this expectation, we choose companies with improved earnings.

risk warning

The macro economy continued to decline, and new investment capacity exceeded expectations.