Next year, the pressure on new cement production capacity will be eased

The current urbanization process in the eastern and western regions of China is quite different, which also provides cement with a broad market base. Industry insiders expect that the pressure on new cement production capacity in China will be reduced in 2013, and the supply and demand of cement is expected to improve on the margin.

Northeast Securities believes that the regional characteristics of the cement industry make local production pressures and the marginal supply and demand conditions somewhat different. It is recommended that we focus on the East China and Central China regions. At the same time, it is expected that the recovery of infrastructure investment will continue, and the demand effect of many projects approved in the second half will be gradually reflected in the first half of next year. Based on experience, it is worth looking forward to investment actions. In terms of valuation, the P/E ratio and P/B ratio have rebounded in the fourth quarter, but the overall valuation is currently at a relatively low level in the longitudinal direction. Some cement companies have certain investment value even from the perspective of industrial capital. In view of the industry's trend of better supply and demand next year, combined with the adjustment of cement stock prices this year and the current valuation, it is proposed to focus on Conch Cement, Huaxin Cement, Chaodong Cement and Tongli Cement.