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Sector Update - Cement Sector
January 20, 2015 09:54

The government’s unexpected move to intervene in the cement market by asking cement SOEs to lower their cement selling prices negatively affected sentiment as seen in the deep share price corrections since Friday afternoon. The impact on earnings will be less pronounced, however, as demand is expected to improve while transportation costs will fall. Nonetheless, we cut our TPs for the three cement stocks under our coverage by 2-4%. At current levels, the cement stocks look an attractive proposition given the unfolding infrastructure story and because of their deep discounts to their construction counterparts. Semen Indonesia remains our Top Pick in the sector.