DBS: China Cement Sector

China Cement Sector: Is market too optimistic on 2H recovery?

• Cutting our 2022 cement consumption forecast from -1% to -5% per our base case to reflect worse-than-expected slowdown in property constructions
• Market may have overestimated the support that infrastructure sector can bring in 2H22
• Slash FY22F/FY23F earnings by 13-16% for the cement names we cover on lower sales assumptions
• Cut TP upon benchmarking trough cycle multiples; downgrade CR Cement to SELL, Conch and West Cement to HOLD, but BUY CNBM’s non-cement prospect