Building Materials Industry Risk And Investment Strategies
Building Industry Credit Risk Analysis Section
First, the risk of building materials industry
(A) the risk of cement industry
The risk of long-term sustained tightening. 2008 1-5 month CPI rose 8.1% in May CPI fell to 7.7%. After the earthquake are still raising the deposit reserve ratio indicating the state adhere to tight policy stance. If the actual fixed-asset investment continued to slow down will adversely affect the cement industry, cement industry, even before the end of the business cycle.
Coal price rise risk. Coal prices soared and greatly increased the cement industry cost pressures, large enterprises competing construction waste heat power generation project is in response to high energy prices. Therefore, the impact of rising coal prices for different sizes of cement enterprises is asymmetric, on waste heat power generation projects with a relatively large-scale enterprises will be less, for small businesses is fatal.
The risk of irrational competition. Large-scale expansion will bring more business competition. Especially in spite of long-term industrial distribution, competing projects, expansion of production capacity in areas such competition more prominent, now is the best classic Sichuan, Hunan is a.
(B) the risk of the glass industry
The main risk is that heavy oil, soda ash and coal price risks. Without exception, these three elements of glass production was up, and all gains amazing. In addition to a price drop of soda ash is expected, the heavy oil and coal are also likely to continue rising.
The risk of frequent cycles overlap. Technical barriers to low flat glass industry, once the industry boom in the high degree of point production can often be expanded within a year. That the consequences of blind expansion of production capacity is overcapacity, oversupply, lower prices, the industry into a downturn.
Second, the appreciation of RMB
Appreciation of the RMB in terms of impact on the building materials industry as a whole is not, but the company, this will make it a certain decline in profitability.
(A) Cement
RMB appreciation in the short term for the cement industry has little effect. China is the world's largest cement producer, however, the scale of the present export, export part of the small proportion of the total, therefore, exports for the entire cement industry has little effect. Together with various cement raw materials and energy procurement in China, RMB appreciation for the basic domestic sales of cement within the production had little impact.
High against the dollar, but is expected to continue to rise, coupled with low interest rates and low cost, making the continuous influx of foreign capital basis of domestic industry, cement industry will face a second investment upsurge.
First, financial capital (Morgan, Goldman Sachs, etc.) remains positive appreciation of the renminbi, cement industry and capital invested large, long-term returns considerable financial capital must meet the requirements. Generally used to buy into the investment industry leading the way, now the investment, such as JP Morgan Investment Conch, CDH landscape, Goldman Sachs and other investment Mengxi.
Second, industry capital (Lafarge, Howe West Union, Heidelberg, etc.) long-term bullish on the Chinese market and high returns. Opportunity to take advantage of macro-control, holding areas for using the purchase method of quality cement enterprises, such as Western Union Ho acquisition of new century China, Lafarge acquired two-horse, the acquisition of Heidelberg Yuexiu so.
(B) glass
Relative to the cement industry, exports of the industry is relatively larger, the renminbi appreciation on trades have been affected. Perspective on specific companies, export-oriented enterprises (such as Fuyao) the impact on a larger share of its domestic market and import processing enterprises storm is relatively small. At the same time, the processing of glass to maintain a substantial increase in exports, will also be caused by revaluation losses.
(C) steel
RMB appreciation on the best interests of the steel industry is to reduce the procurement cost of the steel industry: At present, about 40% dependent on imported iron ore, iron ore-based raw materials and to account for 30-40% of the cost of steel; benefit of the listed company including Baosteel, Wuhan, Maanshan, Jinan Iron and Steel, Dragons, etc. to import iron ore as the main raw material of the company, the company's iron ore imports and domestic procurement procurement is basically the ratio of 7:3, the other, such as Anshan Iron and Steel, the new steel Such vanadium-based company owned mining company, was less affected.
RMB appreciation on the negative effects of the steel industry is to increase imports of steel products, while reducing exports. Of course, this negative impact is medium to long term, in the short term spread by domestic demand and domestic constraints, this negative impact can be ignored: First, the current domestic steel demand remains strong, exports, compared to just 4% share of production. From the product structure, exports mainly low value-added products such as wire and the general board, imports Zeyi domestic production or capacity planning can not be of high value-added products, including automotive sheet, ship plate, etc.. Second, the current spreads at home and abroad in more than 20%, even if the RMB is still not make up a spread. Medium and long term, with spreads narrowing, especially in the CIS prices are now closer to domestic prices, the prices of these regions has negative effect on domestic prices, while the RMB appreciation will increase this impact. For the specific impact of the company is negligible, because the steel industry, the ratio of exports of listed companies is very small.
by: gaga
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