Research & Stock Picks

Company Reports

24 January 2025

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Cement: Underweight with INTP as Top-Pick

Strength

Cement players may benefit from lower  coal prices (energy costs up to 50% of COGS), projected to decline -12% YoY to USD 120/t in 2025 (from USD 136.4/t in 2024), driven by global economic uncertainties and oversupply pressure

 

Weakness

Limited upside for domestic sales volumes as oversupply and low utilization rates (proj: c.55) continue to trouble cement producers; Intense competition from Chinese players may continue to apply pressure on already narrow margins

 

Opportunity

The government’s 3mn housing program, VAT subsidy scheme and potentially lower interest rates should help stimulate property demand ahead; severe market underperformance may present trading opportunities for investors

 

Threat

Potential delays on  the implementation of the government’s 3mn housing program coupled with weak purchasing power and higher for longer USD trend, may cause weaker-than-expected earnings and persistent market underperformance ahead

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