Anhui Conch Cement Co. Ltd.

  • Ticker0914
  • ISINCNE1000001W2
  • ExchangeHong Kong Stock Exchange
  • SectorConstruction & Materials
  • CountryChina
UOB
Neo Chen Wentao ...
  • Sandra Huang Jieqiong

Cement - Demand recovery on track in May

Cement prices are showing recovery in May with national ASP (stripping northeast) inching up 1%yoy. Demand is picking up with cement storage capacity ratio declining from Feb 20’s 73% to 54% in May, while cement production in April was up 51.15% mom, the highest since 2015. FAI for both infrastructure and property has rebounded from February’s low. We believe infrastructure FAI will be the key driver for cement demand for the rest of 2020, backed by supportive policies. Maintain OVERWEIGHT.

UOB
Greater China Research Team

Infrastructure - Infrastructure REITs Pilot Scheme: Baby steps

While we are optimistic for infrastructure REITs to gain traction in the long term as it aligns with China’s structural reform goals, projections of near-term impact would be premature for now as key details remain sparse. We expect a scale of Rmb300b- 500b to set the ball rolling. This reinforces our positive view on infrastructure FAI. Within our coverage, Sany Heavy, Zoomlion and Anhui Conch could be upstream beneficiaries. Unfavourable tax regime may be a potential stumbling block.

UOB
Eric Wang Zhen ...
  • Ivy Xu Da
  • Jayson Kong
  • Joyce Chan Pui Lai
  • Julia Pan Mengyao
  • Ken Lee
  • Lee Yuk Kei
  • Neo Chen Wentao
  • Robin Yuen
  • Sandra Huang Jieqiong
  • Vanness Wong Wan
  • Zhifeng Shen
  • Ziv Ang Sze Champ

Greater China Daily: Wednesday, April 29, 2020

KEY HIGHLIGHTS Results Anhui Conch Cement Co (914 HK/BUY/HK$58.95/Target: HK$66.90) 1Q20: Results slightly beat expectation; operations resilient amid COVID-19 outbreak. BYD Company (1211 HK/SELL/HK$45.30/Target: HK$35.00) 1Q20: Core net loss expanded 32% qoq on EV subsidy cuts and COVID-19 outbreaks, missing estimates. Maintain SELL. China Construction Bank (939 HK/BUY/HK$6.25/Target: HK$6.89) 1Q20: Results in line. Solid asset quality but NIM compressed; upgrade to BUY. Goldwind Science & Technology (2208 HK/BUY/HK$7.31/Target: HK$10.06) 1Q20: One-offs to drive earnings growth. Guan...

UOB
Neo Chen Wentao ...
  • Sandra Huang Jieqiong
  • Ziv Ang Sze Champ

Anhui Conch Cement - 1Q20: Results slightly beat expectation; operations resilient amid COVID-19 outbreak

1Q20 net profit fell 19.2% yoy to Rmb4.9b, slightly above our estimate. We attribute Anhui Conch’s resilient margins to its favourable geographical exposure and lower coal cost, despite the sales volume cut during the COVID-19 outbreak. Net cash position has been further enhanced to Rmb63b. We maintain our bullish view on the cement market in 2Q20 and beyond. Maintain BUY with target price unchanged at HK$66.90.

ANHUI CONCH CMT.CO.LTD. reduced its risk exposure resulting in an upgrade to Slightly Positive

ANHUI CONCH CMT.CO.LTD. (HK), a company active in the Building Materials & Fixtures industry, reduced its market risk and raised its general evaluation. The independent financial analyst theScreener awarded an improved star rating to the company, which now shows 3 out of 4 possible stars; its market behaviour has improved and can be considered as defensive. theScreener believes that this new assessment merits an overall rating upgrade to Slightly Positive. As of the analysis date April 21, 2020, the closing price was HKD 58.85 and its potential was estimated at HKD 62.72.

Dave Nicoski ...
  • Ross LaDuke

Int'l Insights: EM Strategy

EM Outperforming; Favor EM over EAFE With many global markets crumbling last week, one might assume that EM would have underperformed -- but that is not what transpired. What we saw was a decline in the US dollar which, along with improving coronavirus metrics in China, led to EM outperformance. Reiterating our 12/20/19 EM Strategy, we continue to believe EM is a better place to be than EAFE, supported by new highs in the EM vs. EAFE ratio and our ongoing belief that the US dollar is likely not headed for meaningfully new highs in the near-term... see charts below. Below we highlight attrac...

Dave Nicoski ...
  • Ross LaDuke

Vermilion Int'l Compass: Global Equity Strategy

EM Remains In Favor; Shanghai Comp Breaking Out A weakening US dollar (DXY) continues to be a major tailwind for both EM equities and the commodity Sectors. Improving price and RS trends for these risk-on areas of the market are among the many characteristics consistent with historical bull markets. Therefore, we continue to label this a bull market and we believe global equities are still in the early innings of a broad-based advance. • EM Equities. Price action has remained weak for the US dollar (DXY), which has been great news for EM equities. As outlined in our 12/19/19 Int'l Compass an...

Dave Nicoski ...
  • Ross LaDuke

Vermilion Int'l Compass: Global Equity Strategy

MSCI ACWI hitting multi-month highs, U.S. remains leadership Note: This week's report is presented in an abbreviated format, as we are publishing the June International Macro Vision book this week (available next Tues. AM). Over the past several weeks we have outlined the case for our increasingly bullish outlook, noting that market internals remain favorable and S&P 500 and MSCI ACWI price trends are showing evidence of early-stage uptrend formations. In today's report we provide an overview of international markets and highlight our top recommendations. • Index overviews. Led by U.S. outp...

Dave Nicoski ...
  • Ross LaDuke

Int'l Insights: EM Strategy

Highlighted themes and actionable charts: • Emerging markets (MSCI EM) versus Developed international (MSCI EAFE). Recent USD strength has weighed on EM's relative performance. Given (1) strength in commodity prices (sans precious metals), (2) the potential for some backing-and-filling of the USD, and (3) MSCI EM price and relative strength support levels continuing to hold, we see recent weakness as a buying opportunity... see below, left • Actionable countries. The MSCI BRIC index has reasserted its leadership status (see below, right) thanks primarily to a resurgent China which accounts f...

UOB
Neo Chen Wentao ...
  • Sandra Huang Jieqiong

Cement - Demand recovery on track in May

Cement prices are showing recovery in May with national ASP (stripping northeast) inching up 1%yoy. Demand is picking up with cement storage capacity ratio declining from Feb 20’s 73% to 54% in May, while cement production in April was up 51.15% mom, the highest since 2015. FAI for both infrastructure and property has rebounded from February’s low. We believe infrastructure FAI will be the key driver for cement demand for the rest of 2020, backed by supportive policies. Maintain OVERWEIGHT.

UOB
Greater China Research Team

Infrastructure - Infrastructure REITs Pilot Scheme: Baby steps

While we are optimistic for infrastructure REITs to gain traction in the long term as it aligns with China’s structural reform goals, projections of near-term impact would be premature for now as key details remain sparse. We expect a scale of Rmb300b- 500b to set the ball rolling. This reinforces our positive view on infrastructure FAI. Within our coverage, Sany Heavy, Zoomlion and Anhui Conch could be upstream beneficiaries. Unfavourable tax regime may be a potential stumbling block.

UOB
Eric Wang Zhen ...
  • Ivy Xu Da
  • Jayson Kong
  • Joyce Chan Pui Lai
  • Julia Pan Mengyao
  • Ken Lee
  • Lee Yuk Kei
  • Neo Chen Wentao
  • Robin Yuen
  • Sandra Huang Jieqiong
  • Vanness Wong Wan
  • Zhifeng Shen
  • Ziv Ang Sze Champ

Greater China Daily: Wednesday, April 29, 2020

KEY HIGHLIGHTS Results Anhui Conch Cement Co (914 HK/BUY/HK$58.95/Target: HK$66.90) 1Q20: Results slightly beat expectation; operations resilient amid COVID-19 outbreak. BYD Company (1211 HK/SELL/HK$45.30/Target: HK$35.00) 1Q20: Core net loss expanded 32% qoq on EV subsidy cuts and COVID-19 outbreaks, missing estimates. Maintain SELL. China Construction Bank (939 HK/BUY/HK$6.25/Target: HK$6.89) 1Q20: Results in line. Solid asset quality but NIM compressed; upgrade to BUY. Goldwind Science & Technology (2208 HK/BUY/HK$7.31/Target: HK$10.06) 1Q20: One-offs to drive earnings growth. Guan...

UOB
Neo Chen Wentao ...
  • Sandra Huang Jieqiong
  • Ziv Ang Sze Champ

Anhui Conch Cement - 1Q20: Results slightly beat expectation; operations resilient amid COVID-19 outbreak

1Q20 net profit fell 19.2% yoy to Rmb4.9b, slightly above our estimate. We attribute Anhui Conch’s resilient margins to its favourable geographical exposure and lower coal cost, despite the sales volume cut during the COVID-19 outbreak. Net cash position has been further enhanced to Rmb63b. We maintain our bullish view on the cement market in 2Q20 and beyond. Maintain BUY with target price unchanged at HK$66.90.

UOB
Greater China Research Team

Strategy - Reassessing Impact Of COVID-19

With COVID-19 becoming a global pandemic, economic activities are unlikely to normalise by the end of May. Weak overseas demand would pose further challenges to Chinese corporates which are already hurting from a domestic slowdown. We reassess the fair values of our key stock picks in the best-, base- and worst-case scenarios, and highlight the stocks that are resilient during the pandemic, namely Ausnutria, Mindray, SHKP, Weichai and Tencent.

UOB
Johnny Yum Chung Man ...
  • Joyce Chan Pui Lai
  • Ken Lee
  • Neo Chen Wentao
  • Sandra Huang Jieqiong

Greater China Daily: Wednesday, March, 27, 2019

KEY HIGHLIGHTS CHINA Results Anhui Conch Cement (914 HK/BUY/HK$44.40/Target: HK$54.50) 2018: Strong performance, in line. A good start to 2019. Brilliance Auto (1114 HK/SELL/HK$7.42/Target: HK$5.00) 2018: Profit misses estimate on provisions for proprietary brand. China Meidong Auto Holdings (1268 HK/HOLD/HK$3.81/Target: HK$4.00) 2018: Core net profit up 24.5% yoy, in line. China Yongda Auto Services Holdings (3669 HK/HOLD/HK$6.16/Target: HK$6.00) 2018: Net profit declines 17% yoy, above our estimate but below consensus; upgrade to HOLD. TRADERS’ CORNER SmarTone Telecom (315 HK): Tra...

ANHUI CONCH CMT.CO.LTD. reduced its risk exposure resulting in an upgrade to Slightly Positive

ANHUI CONCH CMT.CO.LTD. (HK), a company active in the Building Materials & Fixtures industry, reduced its market risk and raised its general evaluation. The independent financial analyst theScreener awarded an improved star rating to the company, which now shows 3 out of 4 possible stars; its market behaviour has improved and can be considered as defensive. theScreener believes that this new assessment merits an overall rating upgrade to Slightly Positive. As of the analysis date April 21, 2020, the closing price was HKD 58.85 and its potential was estimated at HKD 62.72.

ResearchPool Subscriptions

Get the most out of your insights

Get in touch