20150623-JP_MORGAN-安徽海螺水泥股份（0914）：STRATEGIC_INVESTMENT_IN_WEST_CHINA_CEMENT-726809

We view Anhui Conch’s（Conch）16.7% investment in West China Cement（WCC，2233.HK NR）as a positive strategic move that will amplify its market position in a region that will strongly benefit from China’s One Belt One Road（OBOR） plan.Along with the company’s 14.8% investment in Jidong Cement，its own and WCC capacity，we estimate all three companies will control c65% market share in the Shaanxi province.Conch’s WCC investment follows its purchase of a 55% stake in Shenhta Cement earlier this week and signals the company’s accelerating M+A efforts at a depressed point of the cycle.Armed with a strong balance sheet and solid free cash generation，Conch is well positioned to benefit from the market downturn.Reiterate OW rating.