Daiwa Research holds positive view on China Resources Cement's agreement with state-owned Fujian Energy to jointly develop and expand the cement and concrete business in Fujian Province.

The research house expects the alliance with Fujian Cement should further increase CR Cement's market share in the province. While Fujian Cement's earnings capability looks weak (it reported net losses for 2012 and 1H13), the house believes CR Cement could help improve Fujian Cement's operational efficiency and  restore its profitability.