Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Commodities analyst with over 25-years of experience. Combining industry knowledge with predictive analytics to develop deep insights for market participants making investment decisions and capital allocations.

Cement Synergies: A Look at CNBM's Sinoma Acquisition

Sinoma's Listed Subsidiaries a Bargain for CNBM

Alpha Factors

Equity Bottom-Up

China National Building Material / Equity Bottom-Up

China National Building Material (3323 HK)

<ul type="disc">
<li>Chinese cement prices look vulnerable to a 1H20 correction of ~10% after jumping ~20% in 2H19 on supply constraints &amp; temporary demand factors.  Industry contacts highlight that demand is already slowing and pricing has begun to roll-over. </li>
<li>We recommend getting defensive and shorting names with significant earnings sensitive to pricing like <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>, whilst pairing this with a long on more solidly positioned producers like <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement Co Ltd H (914 HK)</a> . </li>
</ul>


Chinese cement prices look vulnerable to a 1H20 correction of ~10% after jumping ~20% in 2H19 on supply constraints &amp; temporary demand factors.  Industry contacts highlight that demand is already slowing and pricing has begun to roll-over. 
We recommend getting defensive and shorting names with significant earnings sensitive to pricing like China National Building Material (3323 HK), whilst pairing this with a long on more solidly positioned producers like Anhui Conch Cement Co Ltd H (914 HK) . 


Time to Get Defensive on Chinese Cement: Short CNBM/Long Anhui Conch