Research house Macquarie is turning more positive on the cement sector and expects to see more signs of downstream demand recovery in mid-2013 following a recent market visit.

Macquarie has lifted its target price for Anhui Conch to HK$30 from HK$17.5, and upgraded the stock to "neutral" from "underperform".  It has increased its 2013-14 earnings forecast by 8-11 per cent to factor in stronger consolidation-driven volume growth in the coming 2-3 years. Macquarie is

It has also lifted its target price for China Resources Cement (CRC) to HK$5.2 from HK$3.8, and upgraded the stock to "neutral" from "underperform". The research house increased its EPS estimates for FY2013 by 52 per cent and FY2014 by 39%. Macquarie expects a normal recovery in the cement sector's margin performance across China, with average GP/t rebounding by CNY5-10/t at the country-level. It expects CRC Cement to lead the fierce market competition across its operating area (Guangdong, Guangxi and Shanxi) and continuing to push up its utilisation

Meanwhile, for BBMG it maintains its “outperform” rating. Macquarie said BBMG remains a good value story with minimal earnings risk. The house sees its cement business as having bottomed out in 2H2012, and would recover from the low base in the next 12 months.