From government to supplier-driven pricing in 2011: Cement pricesin eastern/southern/northern China have been strong since 3Q10, thanksto government's control on electric power usage and hence a reduction incement supply. While we believe cement price will remain a supplydriventheme (rather than demand) in 2011, power-control led pricingmomentum will not last long in our view. Instead, we expect supplier'sdiscipline will play a much more important role, with industry leaderstaking the lead such as Conch, CNBM and BBMG. In other words, webelieve supplier’s discipline together with industry consolidation andM&A will be main driver to cement price in 2011. Investment themes in 2011: In addition to supplier's discipline, weexpect three other top-down drivers next year. 1) Regional differential interms of cement price and profitability will remain with northwesternChina enjoying the highest price premium over national average due toits geographical difficulty to entry and dominated by only one majorplayer - Sinoma (1893 HK). 2) Economic housing measures will benefitcompanies with exposure to major cities such as Beijing and Shanghai. BBMG (2009 HK) is the largest supplier in Beijing. 3) In the publicsector, China’s 12th Five-year plan will boost infrastructure spendingand construction in rural and western areas. Earnings revision: We revise up Conch’s 2010/11 earnings estimatesmoderately by 3% to reflect lower than expected minority interest in itslatest 3Q results and leave all other assumptions unchanged. PT, risks: We maintain Neutral on Conch-H share and OW on A-share,with our new Dec-11 PT of HK/Rmb35 from Jun-11 PT of HK/Rmb29,on 3.0x PB or mid-cycle average. Risks: Worse than expected demandand overcapacity in China, and Conch’s earnings growth in 2011.