J.P. 摩根-全球-建材行业-全球水泥业洞察：行业展望与供应数据库-2019.12.9-212页.pdf

Global Equity Research09 December 2019 Global Cement Insights2019 Edition-Outlook and JPM Proprietary Cement Supply DatabaseGlobal Building&ConstructionElodie Rall AC(44-20)7134-J.P.Morgan Securities plcRajesh Patki AC(44-20)7742-J.P.Morgan Securities plcAdrian E Huerta AC*(52-81)8152-J.P.Morgan Casa de Bolsa,S.A.de C.V.,J.P.Morgan Grupo FinancieroBrook Campbell-Crawford,CFA AC(61-2)9003 6101brook.campbell-J.P.Morgan Securities Australia LimitedGunjan Prithyani AC(91-22)6157-J.P.Morgan India Private LimitedJeanette Yutan AC(63-2)8878-J.P.Morgan Securities Philippines,Inc.Indra Cahya,CFA AC(62-21)5291-PT J.P.Morgan Sekuritas IndonesiaSumedh Samant,CFA AC(66-2)684 JPMorgan Securities(Thailand)LimitedPo Wei AC(852)2800 J.P.Morgan Securities(Asia Pacific)Limited*Registered/qualified as a research analyst under NYSE/FINRA rules.See page 206 for analyst certification and important disclosures,including non-US analyst disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment We present the 2019 edition of J.P.Morgans in-depth cement industry analysis which provides a comprehensive outlook for each region using a bottom-up approach from our regional analysts.We also update our JPM proprietary cement supply database and rank individual regions and markets on margin attractiveness from a supply perspective.With the global cement sector trading on 7.8x 2020E EV/EBITDA,we present our four most preferred cement stocks among those covered by J.P.Morgan Global Cement Research Team.Global demand(ex-China)expected to grow at 3%p.a.over 2020-21.We expect global cement demand to grow 1%over 2020-21 with stable trend in China and+3%growth in rest of the markets.While broader macro concerns followed by oil price volatility resulted in recent years of weaker EM cement demand,we expect a more normalised growth environment with EM ex-China growing at+3%.For DM,we expect+2%CAGR,which is a continuation of the pace from the last three years.Supply situation unchanged in DM;continued increases in EM.We expect utilisation rates in developed markets to continue to improve given limited supply addition and our demand growth forecast of+2%,thus providing a supportive backdrop for pricing.The pace of capacity addition announcements in EM has continued but has been mixed across regions given low incremental returns.Also,40%of the identified projects are for grinding capacity,which is an incremental positive as clinker supply is growing at a slower pace.We identify minimal intentions in Eastern Europe,while Latin America and Middle East Africa show a rise in intentions,and slowdown to more normalised levels in Asia.The outlook for EM ex-China cement margins is expected to improve marginally,driven by recovering a demand outlook,partly tempered by sustained supply growth coming online in the near term.Margin attractiveness ranking for markets from supply perspective.We rank broader regions and individual markets according to their levels of utilisation rates and expected supply addition over the next three years,which help in identifying markets with positive outlook on pricing and as a result margins(the US)vs.tougher ones(largely in Africa and Asia).Stock recommendations and Valuations.The Global Cement sector trades on 7.8x EV/EBITDA,16.1x P/E,6.8%FCF yield and 2.6%Dividend yield,on our and Bloomberg estimates for 2020E.From the 20+cement stocks covered by J.P.Morgan Global Cement Research Team,our most preferred stocks are:LafargeHolcim(OW),GCC(OW),Ultratech(OW),Semen Indonesia(OW)and CR Cement(OW).2Global Equity Research09 December 2019Elodie Rall(44-20)7134- Table of ContentsSpecial Focus on Supply Dynamics.9JPM Proprietary Global Supply Database.10Top Picks.28Canada.32United States.39Western Europe.59France.60Germany.66Italy.73Spain.79UK.85Developed Asia.91Australia-Moderation Ahead.92Australia Macro Outlook.98New Zealand Macro Outlook.107Eastern Europe.111Poland.112Russia.117Ukraine.123Emerging Asia.129China.130India:Expect growth trends to moderate after two strong years.133Indonesia.141Philippines.146Thailand.150Middle East&Africa.157Algeria.158Egypt.162Nigeria.166Latin America.171Brazil.172Colombia.183Mexico.1933Global Equity Research09 December 2019Elodie Rall(44-20)7134- Global Cement Insights 2019 EditionWe present the 2019 edition of J.P.Morgans global cement industry in-depth analysis.J.P.Morgans global cement universe is covered by analysts based in the UK,Mexico,China,Indonesia,India,Philippines,Thailand,and Australia.In this report,each of our regional cement analysts has presented the outlook for their respective regions using a bottom-up approach.The report also includes comprehensive stock coverage,valuation summary and top picks of the J.P.Morgan Global Cement Research Team.J.P.Morgan Outlook Summary on Global Cement Industry Global demand likely to remain stable in 2020-2021In 2019 YTD,global cement demand grew 3%driven by strong growth in China(+5%)but moderate growth in the rest of the world(+1%).Outside of China,growth was driven by developed markets(+2%)but partially offset by a lack of growth at emerging markets ex-China(+0%).Over the next two years(2020-21),we expect global cement demand to grow at a+1%CAGR.This deceleration is driven by our expectation for stable trend in China.We expect growth to pick-up in the rest of the world to+3%driven by both DM(+2%)and EM ex-China:(+3%).Given its high weight-to-value ratio,the cement industry is fairly localized in nature,even on a country level.Over 30 years ago,emerging markets accounted for 60%of global demand but this figure has risen to 93%in 2015.We expect the ratio to remain approximately the same by 2020.Figure 1:Emerging Markets account for 90%+of global cement demand%Source:International Cement Review,J.P.Morgan.Within emerging markets,China accounts for the majority of demand.We note that China accounted for 60%of the global cement demand in 2015(vs.19%in 1985).Given our outlook,we expect China to continue to represent 60%of global demand by 2020.60%81%91%93%93%40%19%9%7%7%0%20%40%60%80%100%19852005201020152020EEmerging MarketsDeveloped Markets4Global Equity Research09 December 2019Elodie Rall(44-20)7134- Figure 2:China accounts for more than half of global cement demand%Source:International Cement Review,J.P.Morgan.Among the emerging markets and aside from China,India is the largest market at an estimated 342mt of consumption in 2019 by a wide margin.The next largest within emerging markets are Indonesia(102mt),Vietnam(71mt),and Russia(56mt).Figure 3:Global cement demand in 2018 by region mtSource:International Cement Review,J.P.Morgan.Developed Markets:Western Europe and North America continue to grow at moderate paceWhile the decreasing proportion of developed markets in global cement reflects the extremely strong growth in China over the previous two decades,we also note that demand in developed markets has declined by 31%from a peak of 432mt in 2006 to 299mt this year.Over the last three years though,cement demand in developed markets has grown,driven by a moderate pick-up in North America with some growth in Western Europe,while Developed Asia has posted low growth(due to a lack of growth in Japan).From here,we expect the demand in the North America and Western Europe tocontinue growing,albeit at a moderate pace in 2019-21 with slightly negative trends in Developed Asia.Overall for 2020 and 2021,we expect cement demand in developed markets to grow at+2%per year.19%47%58%60%60%81%53%42%40%40%0%20%40%60%80%100%198520052010E20152020EChinaRest of the World131109541121512171576820200400600800WesternEuropeNorth America Developed AsiaEastern Europe Latin AmericaMiddle EastAfricaAsia ex ChinaChina2,3715Global Equity Research09 December 2019Elodie Rall(44-20)7134- Figure 4:J.P.Morgan outlook for cement demand in developed markets%chg y/ySource:International Cement Review,J.P.Morgan.Emerging Markets:While trends have been mixed in recent years,we expect a more normalized growth environment in the next two years.Following strong growth previously(+5%CAGR 2010-2014),demand growth has been mixed in emerging markets since 2015 driven by the impact from the oil price volatility in recent years and a temporary slowdown in China.In 2019 YTD,however,growth picked up to+3%in all of emerging markets,driven up by a strong increase in China(+5%YTD),while emerging markets ex-China was flat.Outside of China,growth was again mixed with Eastern Europe and Asia ex-China showing moderate growth(+2/+3%),while Latin America and Africa declined slightly(-1%).The performance in Middle East was weak(-8%)due to a sharp fall in Turkey demand(-30%).For 2020 and 2021,we expect a more normalized growth rate of+1%per year for emerging markets overall,with no growth from China,but+3%growth in EM ex-China.We expect this growth to come from Asia ex-China(+5%,mainly attributed to mid-single-digit growth expectations for India and Indonesia),Africa(+3%),and Eastern Europe(+3%).Figure 5:J.P.Morgan outlook for cement demand in emerging markets%chg y/ySource:International Cement Review,J.P.Morgan.3%2%1%2%3%1%2%2%0%2%2%0%2%2%0%-4%-2%0%2%4%6%Western EuropeNorth AmericaDeveloped Asia201720182019E2020E2021E2%-1%2%-5%3%-3%1%-1%-2%0%6%2%2%-1%-8%-1%3%5%3%1%1%3%4%0%3%2%2%3%5%0%-12%-8%-4%0%4%8%12%Eastern EuropeLatin AmericaMiddle EastAfricaAsia ex ChinaChina201720182019E2020E2021E6Global Equity Research09 December 2019Elodie Rall(44-20)7134- Greater contrast in utilisation rates and profitability evolutionImproving demand does not necessarily lead to improving margins,as supply discipline is the key driver of pricing and the ability of companies to cover cost inflation.Utilisation rates might decrease with capacity increases,despite volume growth,as has been the case in several emerging markets over recent years.In the following section,we review this theme in detail,through our updated J.P.Morgan proprietary supply database.Expect moderate demand improvement to support profitability in DMWe expect profitability in DM cement operations to be supported by moderate improvement in utilisation rates as we see(i)no major capacity addition announcements in developed markets and(ii)continued increase in demand at a moderate pace.We view both demand and supply perspectives as broadly providing support to pricing trends and margins in the near to medium term.Picture for EM margins remains mixed although slightly improvingImproving demand backdrop should help margins in EMs.J.P.Morgan regional analysts expect the outlook for margins to be broadly stable/slight improvement in most EM markets,particularly in the backdrop of subdued inflation.We note that supply discipline is less straightforward than in DMs,in our view.Returns on incremental capacity declined over 2012-15 and stabilised over the last 3-4 years.Our proprietary supply database suggests that the pace of capacity addition announcements in EM this year is mixed,with Eastern Europe showing minimal intentions,Latin America and Middle East Africa displaying a rise in intentions,and Asia exhibiting a slowdown in intentions but to more normalized levels.Also,40%of the identified projects are for grinding capacity,which is an incremental positive as clinker supply is growing at a slower pace.The outlook for EM cement margins is expected to improve marginally,driven by a recovering demand outlook,partly tempered by sustained supply growth in the near term,although low returns look to be discouraging new intentions for capacity additions,which suggest potential for margin improvement in the medium term.7Global Equity Research09 December 2019Elodie Rall(44-20)7134- Summary of expectations by regions and main marketsIn the following sections,we discuss the key markets in each region in detail and provide a summary of our outlook on those markets in the table below.Table 1:J.P.Morgan Outlook on Global Cement IndustryCapacity2019-21 CAGRLong term demand outlookUtilisation RateMarket ConsolidationCommentary on pricing2018,mt%(-/-/=/+/+)2018,%Top 3 shareNorth AmericaUS1162.5%(+)85%42%Pricing expected to remain solidCanada202.0%(=)68%73%Pricing expected to hold wellWestern EuropeFrance281.3%(+/=)62%79%Pricing expected to remain solidGermany531.5%(+/=)63%62%Pricing expected to hold upSpain513.0%(=)43%62%Pricing to improve as utilisation rates pick upItaly522.0%(+/=)37%72%Pricing showing signs of recovery given consolidationUK170.0%(+/=)75%76%Pricing expected to hold wellEastern EuropeRussia1112.0%(+/=)49%56%Pricing to improve with inflationPoland244.0%(+)79%69%Pricing expected to remain solidUkraine180.0%(+)51%76%High inflation driving pricing but limited growth otherwiseMiddle East&AfricaAlgeria34-1.7%(+/=)68%81%Softer trends with concerns given further capacity additionsEgypt83-0.1%(+/=)68%37%Pricing expected to remain low due to oversupplyNigeria485.0%(+)44%100%Volatile trends in the recent pastDeveloped AsiaAustralia18-2.0%(=)75%90%Steady trendsEmerging AsiaChina3,2900.0%(=)72%32%Continues to be driven by government policy India4754.2%(+)71%55%Pricing expected to be solid this year and flattish next yearIndonesia1034.9%(+)61%85%Pricing expected to increase with inflationPhilippines3810.0%(+)75%66%Pricing expected to be soft in next two yearsThailand602.0%(=)56%85%Pricing remains range-bound given low utilisationLatin AmericaMexico622.5%(+)75%77%Pricing expected to increase on improving demandBrazil1153.3%(+)50%60%Limited improvement expected given low utilisation rate.Colombia243.0%(+)70%84%Pricing expected to further increase in near-termSource:J.P.Morgan.Consolidation:Combined market share of the top 3 players.8Global Equity Research09 December 2019Elodie Rall(44-20)7134- J.P.Morgan Global Economic OutlookTable 2:Summary of J.P.Morgan Global Economic OutlookSource:J.P.Morgan(Global Data Watch on 29 Nov 2019)9Global Equity Research09 December 2019Elodie Rall(44-20)7134- Special Focus on Supply DynamicsSpecial Focus on Supply Dynamics10Global Equity Research09 December 2019Elodie Rall(44-20)7134- JPM Proprietary Global Supply DatabaseWe had introduced the J.P.Morgan proprietary global cement supply database in our second edition of the Global Cement Insights report.In this version,we update the announced supply additions database and make the following key conclusions:Key Conclusions1.Overall rate of capacity addition announcements has been broadly similar to the pace last year with:a.Continued lack of intentions to increase supply in developed markets(US and Western Europe)b.Sustained pace of capacity addition announcements in EM,though the data is mixed by region due to:i.minimal intentions in Eastern Europe ii.higher announcements in Latin America and Middle East Africa iii.slowdown in intentions in Asia but to m