HK Stock Market Move | Cement stocks rose across the board today. The accelerated implementation of the revised capacity replacement method helped clear excess capacity, and efforts were made to stabilize growth in demand.

Cement stocks rose across the board today. As of press time, CNBM (03323) rose by 6.05% to 3.68 Hong Kong dollars; CR BLDG MAT TEC (01313) rose by 5.39% to 2.15 Hong Kong dollars; WESTCHINACEMENT (02233) rose by 3.42% to 1.21 Hong Kong dollars; and Huaxin Cement (06655) rose by 2.96% to 8.7 Hong Kong dollars. CITIC SEC pointed out that since 2024, cement demand has significantly decreased, leading to industry losses. The Ministry of Industry and Information Technology has issued the "Implementation Measures for Capacity Replacement in the Cement and Glass Industry (2024 Edition)", which is expected to accelerate the removal of outdated cement clinker production capacity of over 300 million tons, reducing actual capacity from 21 billion tons to within the designed capacity of 18 billion tons. The optimization of supply-side capacity will help improve the industry's ecological environment, and the cement industry is expected to change from significant losses to a more reasonable profit level. Huatai pointed out that after two consecutive significant declines in October, the building materials index has shown a volatile rebound, possibly due to weak performance in construction output and expectations for improvement from incremental policies. Looking ahead to 2025, changes on the supply side may be more prominent, with more policy constraints and industry self-regulation in the cement/glass sector, leading to debt repair for companies' balance sheets and cash flow. Demand growth is expected to stabilize, with a focus on the turnaround in real estate and the price trend of pro-cyclical sectors.