The hottest new capacity sword hangs high. There i

There is room for the capacity valuation of the building materials industry to increase production capacity

stimulated by factors such as capacity control, backward elimination, active acquisition and annexation, the overall valuation level of the cement industry is expected to be improved

the problem of capacity has troubled investors for more than half a year. At present, how to treat overcapacity and investment opportunities is the key investment point of the cement industry in 2010

the sword of new production capacity hangs high

from the perspective of the investment growth rate of the cement industry, the growth rate has been more than 50% for two consecutive years, and the annual investment amount has exceeded 100 billion, which is equivalent to the sum of industrial investment in the past five years. According to the normal construction cycle, the year is the year of centralized supply release, and the production capacity increment in 2010 is heavier

therefore, the whole industry needs to quietly digest the rapidly increased production capacity in 2010; The annual supply growth rate is between 11% and 16%; From the perspective of time distribution, the pressure is greater in the first half of the year. Depending on the upper limit of the above range, from the perspective of experience, the elimination volume has never been much in the first half of the year, and the pressure will gradually reduce in the second half of the year, close to the lower limit of the above range; From a regional perspective, the region with small incremental supply pressure is in the second half of 2009. We have been exaggerating the Yangtze River Delta, Pearl River Delta, Bohai rim and Northeast China

there is room for improvement in the valuation

reason 1: in terms of the expectation of new capacity, from 2010 to 2011, the increment will be very small

since the second half of 2009, the expected variable of the cement industry, zhongzeng electronic tensile testing machine, is composed of measuring system, driving system, control system, computer and other structures, plus a new exogenous variable, namely government policy. So far, through the government's policy, we can clearly read: when we look at 2011 through 2010, the increase of industry supply will be very small

reason 2: backward elimination is another important policy variable for the promotion expectation and then the processor to deal with this signal

"completely eliminate 500 million tons of backward production capacity in three years, nearly 30% of it" - this is an administrative task. No matter how the market has no determination and belief in eliminating backward production capacity, it can be expected that the elimination within the administrative order. If 500 million tons are completely eliminated in three years, the average annual supply pressure can be reduced by about 10%. In addition, there is less energy for new production in the industry in 2011, that is, the industry will face the process of continuous reduction of overall production capacity after 2011

reason 3: the merger and reorganization flow will be more active, and the concentration is expected to increase rapidly

annexation and reorganization is a story that the cement industry has been looking forward to, but in the past, the actual investment logic of cement stocks was basically driven by the expected changes in price caused by the relationship between supply and demand. In 2010, the investment opportunities expected to be brought by annexation and reorganization will be greater than before

under the background of blocked new construction, the road of enterprise expansion will gradually transition from new construction to annexation and reorganization. Moreover, annexation and reorganization also conform to the national policy direction, and the industry concentration may further improve with 2010 as the turning point. With the improvement of industry concentration, under the logic that the relationship between supply and demand ultimately determines the trend of prosperity, the stability of industry profits will be further enhanced and the periodicity will be weakened. The upward trend of demand is more certain

real estate has become a significant increment in the logic of cement demand in 2010. The speed of real estate sales is faster than the new construction data. The demand of real estate developers to replenish inventory at least ensures that the new construction area will maintain an increasing trend from the fourth quarter of 2009 to the first half of 2010, and the demand for cement will grow according to the monthly lag

the marginal increment of new infrastructure projects is constantly decreasing. On the one hand, with the implementation of the 4trillion stimulus plan, the fund expectation for stimulus is constantly decreasing; On the other hand, with the gradual improvement of the economy, the withdrawal of the stimulus plan will also be one of the most common types of reducers in 2010, including helical gear reducers, planetary gear reducers, cycloid pin gear reducers, worm gear reducers, planetary friction mechanical stepless speed changers, and so on. Therefore, we do not place high expectations on the marginal increment of infrastructure

but what needs to be exaggerated is that the amount of cement used in infrastructure projects will also be reflected in a certain increment in 2010. The actual cement consumption stage of key projects that are really started because of the 4trillion policy should be in the second half of 2009 and beyond. At the initial stage of new construction, cement is not needed because of planning, argumentation, relocation and many other reasons. Considering the main railway The construction period of highway and other projects is generally more than two years, that is, in 2010, because the sustainability of project construction will also be reflected in a certain increase in cement demand

it is difficult to guess the demand. Due to its high sensitivity to the macro economy, we still use the traditional method of guessing. According to the prediction of the macro Department of the State Council of the people's Republic of China on the growth rate of fixed asset investment next year of 23%, we give 2010 "cement growth rate/fixed asset investment growth rate" 0. Advanced aluminum lithium alloy components have accounted for 20% of the total aircraft materials; Boeing 787 and eh101 multi-purpose helicopters also adopt a large number of aluminum lithium alloys. 6, the growth rate of cement demand in the whole industry in 2010 was 11. 5%-13。 8%。

therefore, the supply and demand boom in 2010 may be in a weak balance. Especially when the variable of backward elimination will not change beyond expectations, the first half of the year will bear greater pressure on production capacity, that is, the production capacity that needs to be quietly digested and released. However, in the second half of the year, especially in the fourth quarter, the supply pressure of the industry will continue to decrease. Without major changes in demand, the boom will be clearer than that in the first half of the year

grasp the opportunities for valuation promotion

in 2010, especially in the first half of the year, there was great pressure on production capacity - this expectation has been fully reflected in the valuation of cement stocks in 2009. The performance growth is very certain, but the cement industry is bearing a significant valuation discount

with the continuous digestion of production capacity in 2010, the pressure of supply will gradually decrease, and it can be clearly expected that there will be little increase in the supply side in 2011. The valuation will definitely reflect the expectation that the supply growth rate will be reduced, and will be promoted

and once the "three-year elimination of 30% policy" is implemented and promulgated, the supply side of the cement industry will not be as large as you think even in 2010, and it is estimated that the repair speed may be faster (it needs to be observed after the introduction of the policy rules. If the introduction of the policy is serious enough, the repair speed of the valuation will be advanced)

in addition, mergers and acquisitions will certainly bring new investment opportunities, and the flow of mergers and acquisitions in 2010 will be more frequent and market-oriented than ever before, because the way of expanding development through new production capacity has been blocked by national policies, Just think: "the equity of conch group, China's best cement enterprise, has been reported by the media that it may be sold in the merger and reorganization flow (the company has refuted the rumor at the end of September 2009). Is there any merger and acquisition that other enterprises cannot do?" We suggest investors to focus on the investment opportunities of individual stocks brought by mergers and acquisitions with us in 2010

mergers and acquisitions not only bring opportunities to individual stocks, but also the industry concentration has been rapidly improved. In the future, there will be more areas with good competition format in industries such as Xinjiang, Ningxia, Bohai rim, Heiji, and the stability of industry profits will be improved in the future

regional differences are the strategic focus of the cement industry, and selecting the most advantageous regions every year is also an important task of our strategy. Through the previous fundamental analysis, we believe that the regions with better fundamentals of the cement industry in 2010 are mainly concentrated in the East

the relatively small supply pressure in the eastern region, the relatively high elasticity of real estate demand and the deterministic growth of future cement demand brought about by the first recovery of real estate are the core logic of our optimistic view of the eastern region. We believe that in 2010, the eastern region will continue the general trend of supply and demand improvement since September 2009, and the industry outlook will continue to rise (of course, the off-season will show the characteristics of seasonal changes)