HK Stock Market Move | WESTCHINACEMENT(02233) rose nearly 5% in the morning session, with expectations of price increases for both domestic and international cement. The overseas profit elasticity is expected to be realized.

WESTCHINACEMENT (02233) rose nearly 5% in early trading, and as of the time of writing, it has risen 3.42% to HK$1.51, with a trading volume of HK$21.2494 million. Tianfeng released a research report stating that the market was previously concerned about the impact on profits after the devaluation of the Ethiopian currency. In early November, the Ethiopian Minister of Trade and Regional Integration announced the cessation of the previous cement trade arrangement, allowing cement plants to choose distributors and retailers independently. Due to this event-driven news, the company is expected to increase the selling price of cement in Ethiopia. Although there is still a gap with the market selling price, there are still expectations for price increases in the future, and the impact of exchange rate fluctuations on profits has been largely eliminated. The bank believes there is an expectation for cement prices to increase both domestically and internationally. The bank pointed out that the per capita cement consumption in Africa is less than 0.3 tons, equivalent to the level in China 30 years ago. There is still a large growth space in the medium and long term. Currently, the domestic leading companies with new projects in Africa are only WESTCHINACEMENT and Huaxin Cement. However, Huaxin mainly uses acquisition methods, and in terms of regional overlap with WESTCHINACEMENT is low. It is expected that the supply pattern will not be significantly impacted. The acceleration of Huaxin's acquisition actions since 2014 also confirms its positive outlook on the African market. The bank also stated that there is expected to be a large increase in the market value of WESTCHINACEMENT at the current time.