西藏大型水电站 1.2 万亿元投资：对材料行业有利-Greater China Materials-Rmb1.2tn investment in huge hydro station in Tibet positive for materials

Summary of Conference Call Notes Industry Overview - Industry: Greater China Materials - Key Project: Construction of a new hydro station in Tibet with a total investment of Rmb1.2 trillion and an installed capacity of 60-70GW, which is three times that of the Three Gorges Dam [1][2][8] Core Insights and Arguments - Capacity and Power Generation: The new hydro station is expected to generate over 300TWh annually, with a construction timeline of 18-20 years, including 13 years for the main body and 5 years for auxiliary facilities [2][8] - Material Demand: The project will require 20-30 million tons of cement in total, with an annual demand of 1-1.5 million tons. Local companies such as Huaxin, CNBM, and Conch are positioned to benefit due to their proximity to the project [3][8] - Cement Pricing: Current cement prices in Tibet are Rmb500 per ton, significantly higher than the national average of Rmb330 per ton, indicating a favorable pricing environment for local producers [3] - Impact on Metals: The hydro station will increase demand for copper and aluminum due to the power equipment and cables required for power transfer. This could also stimulate local investments in data centers and other power-intensive projects [4][8] - Thermal Power Impact: Once operational, the hydro station may negatively affect demand for thermal power and thermal coal [8] Additional Important Points - Beneficiaries: Cement and steel sectors are direct beneficiaries during the construction phase, with local factories expected to receive orders [3][8] - Investment Opportunities: The project aligns with the 14th Five-Year Plan, which may lead to stronger-than-expected infrastructure demand [10][21] - Risks: Potential risks include weaker-than-expected property demand, government intervention in cement pricing, and production suspensions due to environmental regulations [13][18][22] Company-Specific Insights - Anhui Conch Cement Co. Ltd: Price target derived from A-share price target, with a higher A/H premium of 35% since 2023 [9] - China National Building Material Company: Price target based on a discounted cash flow model with a cost of equity of 13.5% [15] - Huaxin Cement Co: Price target derived using a discounted cash flow model, with a focus on demand in Hubei and Yunnan [22] Conclusion The construction of the hydro station in Tibet represents a significant investment opportunity for the materials sector, particularly for cement and metal producers. The project is expected to drive demand and pricing in these sectors while also posing certain risks related to market dynamics and government policies.