Macquarie has kept its six per cent demand growth forecast for China's cement industry but has reduced its net supply growth forecast from four per cent to 1.4 per cent.
"We remain positive on a 12-month view, given limited supply and compelling valuations even on our lower-than-consensus earnings forecasts."
The house says that sector names have risen 10-40 per cent year-to-date as investors add beta, factoring in a policy-driven recovery in construction.
"We would look for buying opportunities into results amid consensus downgrades for 2012 and as companies provide an unseasonably muted 2Q outlook," Macquarie says.
