Demand for cement industry increased again

The cement industry is affected by the expected changes in real estate regulation, resulting in an upward push.

A few days ago, the housing-related companies that had been in a state of stalling were reviewed or fine-tuned. According to statistics, since the beginning of this year, there have been six housing-related enterprises that have launched a re-enactment plan, and the previous fixed-income program was terminated due to real estate regulation. This may mean that there has been a slight change in the policy situation. Some investment bank sources disclosed that the regulators internally considered the limited relaxation of housing companies and allowed companies that meet relevant conditions to submit materials.

The phenomenon of “restricted relaxation” in the review of housing-related enterprises may indicate that the government has adjusted the general idea of ​​the regulation of the property market. In the future, the systemic and long-term mechanism will become more prominent. At the same time, macroeconomic data of the relevant national economy may be referenced. Formulate scientific quantitative indicators related to real estate regulation. Some market participants even anticipate that real estate in the second- and third-tier cities may have new changes in regulatory thinking. This demand for the cement industry is undoubtedly positive.

As we all know, the demand of the cement industry mainly comes from infrastructure investment, real estate investment and rural market. In the second quarter of this year, with the expectation of severe real estate regulation, the cement industry has achieved a steady increase in demand for new rural construction and infrastructure investment, and has achieved both a rebound in cement production and an average price in the country. If the real estate regulation changes, it will undoubtedly support the improvement of the cement industry's profitability in the second half of this year.

From January to April this year, the national real estate development investment increased by 21.1% on nominal terms, which is an increase of 0.9% from January to March. Among them, residential investment increased by 21.3%, and the growth rate increased by 0.2 percentage points. With the continued improvement of real estate sales and the active adoption of land from enterprises, it showed that real estate investment continued to pick up momentum.

Infrastructure investment maintained stable growth from January to April, and the State Council's cancellation and decentralization of administrative approval powers may also stimulate the rapid growth of private investment. The latest batch of decentralized administrative approval projects include: Corporate investment in the expansion of civilian airport project approval, water conservancy Approval of project start-ups, approval of railway lines for use in enterprises and the approval of the State Railway. This means that the speed of approval of some infrastructure projects will accelerate, and local governments will be able to introduce more private funds into relevant infrastructure investment areas.

In light of this, it is expected that the overall size of social fixed asset investment will continue to improve in the second half of the year. Except for infrastructure investment and rural demand continued to improve, the recovery of real estate investment in some regions may make the demand for the cement industry in the region continue to improve. At present, Huaxin Cement, Jiangxi Cement, and Shangfeng Cement account for a considerable proportion of downstream customers in the real estate sector, and are located in the East China region where the market price is the strongest, and their future performance is more flexible.