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Cement is also “crazy”?

    According to Wind data, Conch Cement, Jidong Cement, Wannianqing and Huaxin Cement are expected to double their net profit in the 2018 performance forecast issued by the listed companies in the cement sector. At the same time, according to the data analysis of China Cement Network Research Institute, the profit of cement industry in 2018 is expected to exceed 150 billion yuan, becoming the new peak after 2011. Among them, the gross profit per ton of cement will exceed 100 yuan, while the gross profit per ton in 2017 is 75 yuan, an increase of 33.33%.

  According to Wind data, as of now, there are 21 listed companies in the cement sector, 10 of which have announced the 2018 annual report performance forecast, and the net profit of 7 companies has increased year-on-year. Among them, the top three net profit growth were Jidong Cement, Wannianqing and Tata Group, with an increase of 188% to 204%, 130% to 170% and 115% to 165%. At the same time, Wind data shows that the current 21 listed companies in cement, as of yesterday’s close, the total market value of 299.47 billion yuan. The top five market capitalization are Conch Cement, Huaxin Cement, Jidong Cement, Tower Cement and Western Construction.

  Zhao Peng, senior analyst of Huatai Securities Building Materials Industry. The main reason for the bumper harvest in the cement industry is the sharp increase in cement prices nationwide last year. The main driving force behind this is that there are several points. First, the demand for real estate remained unchanged last year. A high level of one position, high turnover mode is also a demand for the front-end cement, and secondly, because the industry’s peak production is suspended, one measure is to complete the comparison, and the cement associations of the provinces at the beginning of the year plan to stop production. It is an effective implementation, and it also solves the problems of overcapacity in a purchased manner. In the end, it is the cause of weather pollution, which makes the local government’s phased environmental protection stop measures gradually increase the tension between supply and demand in various industries.

  Wind data shows that from 2011 to 2013, the capacity utilization rate of the cement industry is above 70%, the number of supply-end enterprise exceeds 3, 800, and the capacity concentration of the top ten cement companies is only about 32%, but since 2018. The utilization rate of cement industry fell below 70%, the number of enterprises decreased to les than 3,000, and the concentration of the top ten cement production capacity increased to about 45%. The industry believes that the cement industry prosperity in 2019 will continue to be stable, or will usher in a new round of rising cycle.

  Zhao Peng, senior analyst of Huatai Securities Building Materials Industry. Looking forward to this year, the risk of the industry is mainly at the lower level of real estate demand. Such as synergy mechanism established in the past few years in the industry will also be tested in the downturn of real estate. The current opportunity is also quite obvious. According to the latest dividend rate, such as Conch Cement and Tower Group, its dividend yield has reached a level of 8%, so for a long-term fund, the level of such a high dividend return is also very attractive.

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