HK Stock Market Move | Cement stocks fell across the board in the afternoon, with cement production hitting another new low. Institutions predict that more supply control policies will be implemented in the future.

In the afternoon, cement stocks fell across the board. As of the time of publication, CNBM (03323) fell by 4.76% to HK$3.2; WESTCHINACEMENT (02233) fell by 3.01% to HK$1.29; Anhui Conch Cement (00914) fell by 2.8% to HK$20.85; CR BLDG MAT TEC (01313) fell by 2.55% to HK$1.91. On the news front, in the first three quarters of this year, due to the sluggish real estate investment and the continuous slowdown in infrastructure investment growth, cement production hit a new low. According to data from the National Bureau of Statistics, from January to September 2024, the new construction area of houses nationwide decreased by 22.2% year-on-year, with the new construction area of residential houses decreasing by 22.4%; infrastructure investment nationwide (excluding electricity) increased by 4.1% year-on-year, a decrease of 2.1 percentage points from the same period last year; the cumulative cement production of enterprises above designated size in the country was 1.327 billion tons, a year-on-year decrease of 10.71% (calculated on a comparable basis), hitting the lowest level since the same period in 2010. HSBC's research report pointed out that mainland cement prices continue to rise due to supply constraints and seasonal demand improvements, and new capacity replacement regulations will impose stricter restrictions on excess production, helping to accelerate industry consolidation. The bank expects cement demand to continue to decline, but there have been positive and sustainable changes on the supply side, mainly because industry participants are willing to cooperate to maintain reasonable gross margins, which will lead to profit growth in the fourth quarter of 2024 and 2025, as well as the expectation of more government-led supply control policies being introduced.