Trade Resources Industry Views Cement Enterprises to Benefit From Investment in South-East China

Cement Enterprises to Benefit From Investment in South-East China

China's main cement enterprises, such as Anhui Conch Cement are expected to resume profut growth this year due to  infrastructure and property investments in eastern and southern parts of China.

Large-scale  cement enterprises are expected to benefit from construction projects in eastern provinces such as Jiangsu and Zhejiang and Guangdong in the south, and a government push to  consolidate the sector.

After the declining profits of last year, cement enterprises such as Anhui Conch Cement, Asia Cement and Huaxin Cement are expected to gain profits this year because a low coal price lower the costs.

Up to now, major listed cement enterprises have released strong results, some of which doubled profits from last year.

"We continue to prefer east of south China where we see higher margins. We believe north China market will stay stable with low margins."

However, analysts warn that a significant cooling in China's red-hot property sector, a slowdown in railway investments and a bigger-than-expected rebound in low coal prices could take some shine off cement makers' prospects.

Some analysts have also warned the strength in certain infrastructure investments could result in a buildup of inventory.

 

Written by Nicolas Yang

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Topics: Construction