Furui stated that under the stimulus plan, all commodities felt positive in the fourth quarter, with a preference in the following order: cement, aluminum, copper, iron, and lastly coal.
According to the Financial Intelligence APP, Furui released a research report stating that the target prices of Chinese cement stocks have been raised. Conch Cement's (00914) target price increased from 15 Hong Kong dollars to 30 Hong Kong dollars, while CR Cement (01313) saw its target price rise from 0.94 Hong Kong dollars to 2.47 Hong Kong dollars, with both stocks upgraded to a "buy" rating. China National Building Material (03323) also had its target price raised from 4.01 Hong Kong dollars to 6.04 Hong Kong dollars, with a maintained "buy" rating.
The bank pointed out that the surprise stimulus measures announced by the mainland at the end of last month. The bank believes that this round of quantitative easing is sustainable and will help reverse demand. Most commodities had good destocking conditions before the peak season, and it is anticipated that the demand in the fourth quarter will improve year-on-year as the base in the fourth quarter is low, for example, cement. The bank is most bullish on cement in the fourth quarter, as more convincing evidence indicates that supply constraints will lead to more sustainable price increases. Under the stimulus plan, the bank feels positive about all commodities in the fourth quarter, with a preference in the order of cement, aluminum, copper, iron, and lastly coal.