中国基础材料_全球最大水电站将如何影响中国水泥和钢铁需求-China Basic Materials_ How world‘s largest hydropower dam impacts China‘s cement & steel demand_

Summary of Conference Call Notes Industry Overview - Industry: China Basic Materials, specifically focusing on cement and steel due to the construction of the world's largest hydropower dam in Tibet - Project Details: The dam will have an installed capacity of 60 GW, which is 2.7 times that of the Three Gorges Dam, and is expected to take 10-20 years and cost Rmb1.2 trillion to complete [2][3] Key Points and Arguments 1. Cement Demand Impact: - The Tibet hydropower dam is projected to consume a total of 43 million tonnes (mt) of cement over its construction period, averaging approximately 4.3 mt per year [3] - This incremental demand represents less than 0.2% of China's annual cement capacity but will increase Tibet's cement demand by one third [3] - Major cement producers in Tibet include Tibet Tianlu (33% market share), Huaxin (25%), CNBM (19%), and Anhui Conch (7%) [3][4] 2. Steel Demand Impact: - The dam is expected to generate an annual steel demand of 0.6 million tonnes per annum (mtpa), accounting for 0.05% of China's total steel capacity [5] - Regular steel products are estimated to constitute 60% of the total demand, while special steels will account for the remaining 40% [5] 3. Earnings Impact: - The project is anticipated to have limited earnings impact on major companies involved, with expected contributions to net profits as follows: - Tibet Tianlu: approximately Rmb160 million annually (compared to Rmb104 million net losses in 2024) - Huaxin: around 5% increase in bottom line - CNBM: about 2% increase - Anhui Conch: approximately 0.4% increase [6][8] 4. Market Sentiment: - The market has reacted positively, viewing the project as a potential new round of infrastructure stimulus, although it has been in planning for some time [6][8] 5. Investment Recommendations: - Preference for CNBM with a Buy rating over Conch and CR Building, both rated Neutral, due to attractive valuation [8] - Neutral ratings maintained on steel companies due to limited earnings impact [8] Additional Important Information - Valuation Methodology: The report uses a P/BV-ROE methodology to set price targets, with key risks including infrastructure investment, capacity cuts, supply/demand conditions, and raw material cost volatility [10] - Market Data: Valuation comps for major companies in the cement and steel sectors were provided, indicating current market conditions and performance expectations [9][22] This summary encapsulates the critical insights from the conference call regarding the impact of the Tibet hydropower dam on the cement and steel industries, along with investment recommendations and market sentiment.