Morning Trend | CR BLDG MAT TEC repeatedly tests the key line, can the support hold? Is the short-term rebound window approaching?

CR BLDG MAT TEC (1313.HK) recently opened with a rapid decline, and the stock price has repeatedly tested key technical support, with marginal changes in market sentiment. The building materials sector has been significantly affected by fluctuations in industry policies and demand expectations, leading to increased caution among community funds. It is evident from the market that there are signs of the main force repeatedly defending the market, but short-term funds are frequently withdrawing, and every surge encounters selling pressure from those looking to break even. From a technical perspective, the current trend is approaching a previous area of concentrated trading, and if the volume continues to shrink, it may lead to a risk of stagnation. Indicators such as MACD and KDJ are still hovering in a range and have not fully reversed. If key support is breached, bullish confidence will be greatly undermined. Conversely, if the stock stabilizes here and forms a volume reversal, it could easily attract short-term rebound funds, becoming a potential trigger point for a rebound from oversold conditions. Market sentiment is focused on expectations of a recovery in the real estate chain and infrastructure demand, with some funds cautiously positioning themselves in anticipation of policy catalysts. On the trading front, the main force has not significantly reduced positions over the past few days, but has instead supported the market during declines. If the broader market stabilizes, the likelihood of CR BLDG MAT TEC rebounding first increases. Community traders are generally waiting for effective performance in the lower support area, and once there is unusual fund movement or the sector experiences event-driven catalysts, short-term opportunities may arise. The risk lies in breaking support, which would lead to a new round of divergence in corrections, necessitating quick stop-loss actions. In terms of operations, a phased layout strategy can be adopted, considering increasing positions after a decline to key levels with accompanying volume. Attention should be paid to intraday volume anomalies and policy news; if there is a sudden positive development or sector rotation, the rebound window may open earlier

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Hong Kong stock market building materials and cement stocks strengthened, among which, CNBM rose over 9%, CR BLDG MAT TEC rose over 5%, ACC rose over 4%, Asia Cement, WESTCHINACEMENT, and Jinyu Co., Ltd. rose 2.4%, CHINA TIANRUI and Huaxin Cement followed suit

Shenwan Hongyuan: The bottom repair of the building materials industry, the configuration value is gradually emerging

Shenwan Hongyuan released a research report indicating that the bottom repair of the building materials industry is gradually becoming apparent. The overproduction issue in the cement industry is being resolved, with 38.656 million tons of clinker capacity already exiting, and this is expected to accelerate in the second half of the year. Five signals indicate that the worst moment for the industry has passed, with factors such as rising prices for consumer building materials, reduced capital expenditures, and improved cash flow supporting the industry's recovery. It is recommended to pay attention to companies with cost and scale advantages, such as CONCH CEMENT and CR BLDG MAT TEC

CR BLDG MAT TEC expects cement demand to continue declining

CR BLDG MAT TEC (1313) expects that cement demand in mainland China will continue to decline in 2024, with the sales target adjusted down to 57 million tons, a year-on-year decrease of approximately 8%. The revenue for 2024 is projected to be HKD 23.038 billion, a decrease of 9.8%; net profit is expected to be HKD 211 million, a decrease of 67.2%. The average selling price of cement will drop by 10.6% to HKD 244 per ton, and concrete will decrease by 12.9% to HKD 320 per cubic meter. The company has successfully reversed negative cash flow, with free cash flow for 2024 expected to be HKD 821.3 million