China prices seen rising over 2014-15

Cement prices in China are expected to increase by 10 and five per cent in 2014 and 2015, respectively, according to research report by HSBC. As a result, higher prices as well as lower coal costs may offset rising costs from environmental protection monitoring, the bank expects.

It expects gross profit in 2015 for cement companies to rise by 59 per cent compared to 2012. Over the next two years, the bank predicts the compound earnings growth of the cement sector would reach 35 per cent.

China Resources Cement remains its top pick and Anhui Conch has been upgraded from ‘underweight’ to ‘overweight’. Shanshui Cement was upgraded from ‘underweight’ to ‘neutral’ and CNBM was maintained at ‘overweight.’