Northeast Securities: Focus on opportunities in the African real estate chain and focus on the successful implementation of overseas cement production capacity targets

The Zhitong Finance App learned that Northeast Securities released a research report saying that the cement market is markedly divided due to transportation radius restrictions, market sentiment varies greatly in different regions, and the territorial advantage of the booming market has huge production capacity value. Focus on opportunities in overseas emerging markets, such as sub-Saharan Africa, where there is a large long-term space for demand and strong growth certainty. Furthermore, the current dividends for engineers in China's cement industry are remarkable, and efficiency gains are expected after mergers and acquisitions, and attention is being paid to the progress of international mergers and acquisitions. Pay attention to the macroeconomic development situation and local currency exchange rate trends in the sub-regional markets of Africa.

The main views of Northeast Securities are as follows:

Demographic Perspective

Africa's urban population continues to grow rapidly, with a growth rate of over 3.5% in 2025. Since 1990, the size of African cities has ushered in unprecedented expansion. According to UN statistics, the continent's urban population will grow at an annual rate of more than 3.5% in 2025, and it is expected to maintain the status of the region with the fastest urbanization in the world for a long time in the future. In terms of urbanization rate, sub-Saharan Africa is about 44.7% in 2025, which is roughly equivalent to China's level from 2006 to 2007. From a fertility perspective, the population of sub-Saharan Africa continues to grow rapidly, with an annual growth rate of about 2.5%; sub-Saharan Africa has a total fertility rate of 4.3, which is the highest in the world, nearly double the global average. In terms of population structure, sub-Saharan Africa will account for 40% of the population aged 0 to 14 in 2025, which is significantly higher than 18% in East Asia and the Pacific.

Economic perspective

GDP growth is expected to be steady, and is expected to maintain a growth rate of 4% + in 2026/2027. Africa accounts for about 2.5-3% of the world's GDP in dollars. According to forecasts from the African Development Bank and the United Nations, Africa will continue to maintain steady GDP growth of 4% + in 2026 and 2027. Among them, East Africa and West Africa are expected to lead the growth rate, and the growth of oil importers and exporters is expected to diverge as oil prices change. From an inflation perspective, global oil and gas prices have soared and are continuing to push up inflationary pressure across Africa. The African Development Bank predicts average inflation of 10.4% across Africa in 2026, and the World Bank predicts 4.8% of sub-Saharan Africa's median inflation in 2026.

exchange rate

The overall sub-Saharan exchange rate has strengthened since 2025. In 2025, the currencies of sub-Saharan Africa strengthened overall. Among them, the biggest appreciation was the Ghanaian cedi, the Congolese franc, and the Zambian kwacha; the Ethiopian birr and the South Sudanese pound weakened due to factors such as foreign exchange reform and war, respectively. By the end of December 2025, they depreciated by about 18% and 15%, respectively, against the US dollar. From 2026M1-7, the average value of the new local currency unit of the developing economies in sub-Saharan Africa was 1,412 against the US dollar, compared with -5% of the average for the full year of 2025. The overall strengthening trend continues.

Nigeria

The foreign exchange market was unified in June 2023, and the exchange rate recovered in 2026. The average value of the US dollar to the Nigerian naira in 2024/2025 was 1480/1521, +132%/+3% year-on-year, which is about 4 times that before the exchange rate reform. As of July 27, 2026, the Nigerian naira exchange rate rebounded year on year, and the US dollar stabilized at around 1,376 against the Nigerian naira, -10% compared to the full year of 2025.

ETHIOPIA

The market-determined exchange rate system was implemented in July 2024, and the exchange rate decline narrowed in 2026. The average value of the US dollar against the Ethiopian birr in 2024/2025 was 78/138, +43%/+77%; as of July 27, 2026, the average value of the dollar against the Ethiopian birr was 157, +14% over the full year of 2025.

Risk warning: macroeconomic risks, overseas business risks, competitive landscape risks, rising raw material costs