建材洞察系列之二：水泥盈利延续改善，格局正逐步优化

Investment Rating - The report maintains an "Outperform" rating for the building materials industry [1] Core Views - Cement profitability is expected to improve, benefiting from increased domestic demand policies. The profitability center for 2025 is anticipated to be higher than in 2024 due to falling coal prices and sustained cement prices, indicating that the industry has likely emerged from its profitability bottom [3][32] - The industry faces a consensus on declining cement demand due to the slowdown in urbanization and the real estate sector entering a stock phase. However, there is potential for recovery driven by infrastructure projects and government policies [40][33] - The report emphasizes the importance of capacity reduction and industry consolidation, with a focus on the progress of overproduction governance [3][41] Summary by Sections Cement Profitability - Cement prices have significantly increased in regions like the Yangtze River Delta since September 2024, leading to improved profitability for cement companies in Q4 2024. Despite a seasonal price drop in early 2025, profitability is expected to continue improving due to lower coal costs [3][8] - The average market price for bulk P.O42.5 cement in March 2025 was approximately 349 RMB/ton, reflecting a month-on-month increase of 11 RMB/ton and a year-on-year increase of 32 RMB/ton [13][15] - The report forecasts that the profitability center for cement in 2025 will be higher than in 2024, supported by lower coal prices and stable cement prices, with a focus on observing production reduction efforts in the East China market [32][28] Industry Outlook - The report highlights the need for capacity reduction and increased industry concentration, noting that the cement demand is expected to decline in the short term. The report references international experiences where cement production has significantly decreased [40][41] - The current capacity utilization rate for clinker in 2024 is projected to be 53%, indicating potential challenges for sustained price increases. The report suggests that policy measures will be crucial for accelerating the exit of low-end capacity and improving utilization rates [41][46] - The report discusses the importance of overproduction governance as a key focus for 2025, with expectations of eliminating approximately 500 million tons of capacity, although actual outcomes may vary [49][50] Investment Perspective - The cement industry is characterized by low valuations and high dividend yields, making it an attractive defensive investment. As of April 12, 2025, the price-to-book ratios for Conch Cement and Huaxin Cement were 0.7 and 1.0, respectively [5][3] - The report suggests that the cement sector will benefit from increased domestic demand policies, with a focus on infrastructure and real estate support. The central government's emphasis on reducing competition among leading companies is expected to enhance profitability [5][33] - The report recommends monitoring companies such as Conch Cement, Huaxin Cement, and others for potential investment opportunities due to their strong fundamentals and improved profitability outlook [5][3]