Cement stocks (BCC) struggle despite surge in product price
Cement stocks (BCC) struggle despite surge in product price
While many stocks in the building materials sector like steel or plastic have surged recently, cement stocks are still hovering around a low price zone. 
According to data compiled by the Department of Building Materials, Ministry of Construction, in the first four months of 2021, consumption of cement products is estimated to reach 34.58 million tonnes, up 16.5 per cent year-on-year.
Of which, domestic consumption accounted for around 19.44 million tonnes, a slight increase over the same period last year, while exports of cement products jumped 65 per cent over 2020 to 15.14 million tonnes.
Besides gains in consumption, many cement companies also raised product prices. Accordingly, Vicem Hoang Mai Cement JSC (HOM) has increased selling prices of all cement products by VND30,000 per tonne, which apply for provinces including Thanh Hoa, Nghe An and Ha Tinh.
Bim Son Cement JSC (BCC) also raised its product prices by VND30,000 per tonne from April 21. Hoang Long Cement JSC, Long Son Co., LTD and Duyen Ha Co., LTD increased their prices by VND40,000 per tonne at the same time.
However, in the stock market, these companies' performance was not as good as their product prices.
After positive responses to higher cement prices for a short time, cement stocks fell sharply since early April.
Ha Tien 1 Cement JSC (HT1) shares dropped more than 17 per cent since April to trade at VND15,300 per share on Thursday.
Similarly, BCC shares tumbled over 18.5 per cent during the same period to VND10,100 per share yesterday.
After climbing for ten straight sessions in early April, Vicem Hai Van Cement JSC (HVX) shares plunged 37.5 per cent to trade at VND4,450 per share on Thursday.
The market prices of most cement stocks are currently hovering around their par value.
Gains in cement selling prices will be reflected in the second quarter business results of cement companies, while the first quarter business results of some companies were poor, resulting in the appeal of cement stocks declining.
In the first quarter, Bim Son Cement posted an increase of 0.88 per cent year-on-year in net revenue to VND1.06 trillion, while its profit after tax declined by 61 per cent to over VND7.2 billion.
The company explained that its profit fell in the first quarter due to higher cost of goods sold, outweighing gains in revenues and falls in expenses for financial activities, sales expenses and general and administrative expenses.
Meanwhile, Ha Tien 1’s net revenue also rose slightly by 0.5 per cent year-on-year to VND1.74 trillion in the first quarter of 2021. But its profit after tax edged 9.5 per cent down to VND94.7 billion.
HT1 shares was eliminated from the portfolio of MSCIFrontier Markets Small Cap Index and the company’s leaders registered to sell a huge amount of stocks, which forced HT1 shares to enter a bear market.
