Comparison of Cement Industry in China and India: Concentration, Earnings and Valuation

< P > India's cement earnings and valuation are higher than China's, and its change path has reference significance for predicting the trend of China's cement. India ACC Cement's profit per ton in 2007 was 123 yuan, an increase of 446% over 2003, and the current market value per ton was 881 yuan, an increase of 104% over 2003. In 2007 , the profit per ton of Conch Cement was 26 yuan, an increase of 7%, and the market value per ton was 548 yuan, an increase of 18%.

< P > India is the world's second largest cement producer, with an output of 164 million tons in 2007, equivalent to 12% of China's output. India has 85% of our population and 34% of our GDP. The cement consumption of GDP is 1.49 tons, equivalent to 36% of China's, and the per capita cement consumption is 146 kg, equivalent to 14% of China's.

< P > From 2003 to 2007, the annual compound growth rate of cement demand in India was 8.4%, higher than 4.8% growth rate of cement supply. The main drivers of cement demand were the real estate sector, which contributed 55% of the cement demand growth, infrastructure projects and industrial expansion projects. The utilization rate of cement capacity in India increased from 81.3% in 2003 to 93.8% in 2007.

< P > The average price of cement in India rose from RS.156/bag in 2003 to RS.216/bag. In December 2007, it reached RS.245-RS.250/bag, with a compound annual growth rate of 8.5%. The realized value per ton increased from FY03-Rs.1880/ton to FY07-Rs.3133/ton, with a compound annual growth rate of 13.6%, thus forming a higher profit margin level in India's cement industry.

< P > In the same period, the annual compound growth rate of cement price in China was only 0.1%, the annual compound growth rate of profit per ton was only 4.5%, and the profit per ton in 2007 was only 15.3 yuan. During the same period, the annual compound growth rate of cement demand in China was 13.6%, and the annual compound growth rate of cement production capacity was 8.6%. There are 5195 cement enterprises in China, while only 52 large companies and 365 small cement companies in India.

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