UOB keeps positive view on China cement sector

UOB keeps positive view on China cement sector
Published: 17 December 2010

UOB KayHian stays positive on China’s cement sector and it continues to prefer the eastern and southern regions on tight regional dynamics and sustainable demand growth. The house says sector catalysts include industry M&A wave in 1H11 to trigger re-rating opportunities; sector’s 4Q10 earnings are likely to be significantly above market expectation due to record-high cement prices nationwide; declining cement FAI growth with confirmed capacity capped by the government; likely higher-than-expected 1Q11 cement selling prices; detailed policies on "building materials to rural areas"; and rural policies on the construction of water conservancy projects.