HK Stock Market Move | Cement stocks lead in terms of price increase, industry revenue declined in the first three quarters but profit improved. The process of reducing cement production capacity is expected to accelerate.

Cement stocks led the gains, as of the time of writing, SHANSHUI CEMENT (00691) rose by 4.23% to 0.74 Hong Kong dollars; CNBM (03323) rose by 3.55% to 5.54 Hong Kong dollars; Anhui Conch Cement (00914) rose by 2.9% to 23.4 Hong Kong dollars; CR BLDG MAT TEC (01313) rose by 2.44% to 1.68 Hong Kong dollars. Zhongtai released a research report stating that the cement sector achieved a total operating income of 181.1 billion yuan in the first three quarters, a year-on-year decrease of 8.5%, and achieved a net profit attributable to shareholders of 9.5 billion yuan, a year-on-year increase of 159.1%, benefiting from the low base in the same period last year and the relatively strong industry prices and low coal prices this year. Looking ahead, with the expectation of anti-excessive internal competition, the industry's profitability is expected to continue to improve in 2026. Huatai stated that the core of achieving cement overcapacity reduction is to effectively reduce the capacity and output of clinker production lines. Looking ahead to 2026, on the one hand, under policy constraints, the filling of overcapacity index of clinker production lines is expected to accelerate, promoting the practical stage of cement overcapacity reduction in 2026; on the other hand, the expected re-decline in industry profitability in 25Q3 is expected to accelerate the integration of cement capacity in some regions. In addition to the active integration of the Jidong group in the Northeast market, we expect the market integration process in the southern region to accelerate.