Demand fell more than expected

Cement industry 1, double supply and demand decline, improved in the second half of 2012: Under the tightening policy, financial pressure caused the slow growth of infrastructure construction, and under the cumulative effect of real estate control policies, it has entered volume and price levels. The cement industry has seen negative growth in investment in fixed assets and the pressure on new capacity has slowed. The cement demand in 2012 was estimated to have increased by 6.9% year-on-year, and the overall supply and demand relationship improved. (2) With the gradual release of the risk of declining demand, the release of production capacity will be mainly concentrated in the first half of the year. It is predicted that the prosperity of the cement industry in the first half of the year will continue to decline.

Considering that investment in water conservancy construction is accelerating and real estate investment is expected to recover in the second half of the year, it is expected that demand will restart in the second half of 2012.

2. Currently, the valuation of cement blocks is at a historically low level, and the P/E ratio is only higher than that of the banking sector. This basically releases the risk of declining demand and has a high margin of safety. It is expected that the economy will rebound in the second half of 2012, taking into account the continuous fine-tuning of policies to provide valuation restoration. Opportunities and capital markets started ahead of fundamentals, maintaining the industry's "look" rating.

3. Investment strategy: Focus on the demand side, focusing on real estate sales and changes in the area of ​​new housing starts. On the other hand, attention should be paid to the fine-tuning of macroeconomic policies. The most recent point is the upcoming central economic work conference. Northeast China (Yatai Group), which is optimistic about new production capacity pressure; East China and South China regions with strong demand determination and strong market control (Conch Cement, Tower & Card Group); Concerned about Shaanxi and Chuanxi, which are expected to take the lead out of the trough; Area (Jiandong Cement, Sichuan Shuangma).

Glass industry 1. Although the profitability index of the flat panel industry is currently at the bottom of the range, the degree of prosperity is still falling. With the increase in the number of kiln stoppages and the gradual recovery of demand, it is expected that the economy will rebound in the second half of next year. Building energy efficiency policies drive LOW-E glass demand; the photovoltaic industry is in the doldrums, and domestic TCO glass, if successful in volume production, will receive high profits due to import substitution.

2. Maintain the “neutral” rating of the glass industry, pay attention to the trading opportunities promoted by building energy conservation policies, photovoltaic industry planning, etc., and long-term optimistic about deep processing enterprises with technological advantages and leading companies with complete industrial chain, such as CSG, AVIC Sanxin, Xiuqiang shares, Qibin Group and so on.

New building materials 1. Plastic pipe industry: With the increase of consumption level and improvement of plastic pipe technology, plastic pipes will continue to develop rapidly. In particular, buried drainage pipes benefit from urban internal waste management, sewage treatment and other factors. We are optimistic about the technological advantages of Naskawa Co., Ltd. and the advantages of Weixing New Materials.

2. The concrete admixture industry: With the promotion of popularization of commercial mix, optimization of product structure, and promotion of industrial concentration, the concrete admixture industry has developed rapidly and is optimistic about the Jianyan Group.

The risk suggests that the economic growth has slowed down, the demand growth rate has fallen faster than expected, and raw material prices have risen.