Both Bank of Thailand and Siam Cement data show a deceleration in 1Q06’s cement demand. Siam City Cement (SCCC) is expected to follow the trend as well. Decelerated domestic cement demand should be offset by price increase and better production cost control and lead to flat YoY earnings of Bt1.2bn. The results would pick up 82% QoQ due to seasonal effect.  
 
 SCCC is expensive trading at PE of 15.4x, compared to the cement sector’s average of 13.1x. Limited growth for the company is expected as there is no plan for any major investments and the utilization rate of its cement unit is stretched. The stock is overpriced and trading above DCF target price of Bt256. Underperform is maintained.  
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