Hong Kong stock concept tracking | South Korea intends to import Chinese cement Chongqing main urban area cement prices increased (with concept stocks)

Market news: Due to the high and unchanging cement prices in South Korea, the government is discussing a plan to import cement from China. Since 2021, the South Korean cement industry has increased the price of cement four times, currently at around 594 yuan per ton, an increase of nearly 50%. The South Korean construction industry revealed that the import price of Chinese cement is expected to be around 506 yuan per ton, about 15% cheaper than South Korean cement. It is reported that the import of cement requires various certifications, construction of professional storage warehouses, and other processes, which may take up to two years. Major cement manufacturers in the main urban area of Chongqing have announced a price increase of 50 yuan per ton, while cement manufacturers in the western part of Chongqing have announced a price increase of 30 yuan per ton. With the recent decrease in temperature in Chongqing, which is conducive to construction sites, market demand has improved compared to previous periods. In addition, cement companies are suffering losses, leading to a strong willingness to raise prices. However, the significant price increase has led downstream enterprises to adopt a wait-and-see approach in the short term, and the specific implementation situation remains to be observed. According to a research report from Huatai Securities, the net profit attributable to the parent company of listed cement industry companies covered by their research is expected to decrease by 98% in the first half of 2024, totaling 175 million yuan. According to data from the China State Construction Engineering Corporation Materials Association, the total profit of the cement industry in the first half of 2024 was -1.15 billion yuan, with more than 50% of enterprises experiencing losses. While industry profits continue to decline, companies are optimizing their operations: Market strategies are more inclined towards stabilizing prices, aiming to balance supply and demand through supply control; Continued emphasis on cost control to enhance competitiveness; Further reduction of capital expenditure, with ensuring cash flow becoming a higher priority option. Huatai believes that the consensus on price stability will help the industry achieve marginal recovery in the second half of 2024. The debt ratio of listed companies is still significantly lower than the bottom of the previous cycle, indicating a healthy financial situation. Related Hong Kong stocks in the cement sector include Anhui Conch Cement (00914), WESTCHINACEMENT (02233), CR BLDG MAT TEC (01313), and Huaxin Cement (06655).