In order to achieve the double carbon goal as soon as possible, the building materials industry should speed up industrial optimization and upgrading. In January, the Political Bureau of the CPC Central Committee held the 36th collective study on striving to achieve the goal of carbon peak and carbon neutralization. The meeting pointed out that to promote the “double carbon” work, we must adhere to the principles of national overall planning, saving priority, two wheel drive, internal and external unimpeded and risk prevention, give better play to China’s institutional advantages, resource conditions, technological potential and market vitality, and accelerate the formation of an industrial structure, mode of production, lifestyle and spatial pattern that saves resources and protects the environment. We should strictly control the carbon emission of new projects and resolutely curb the blind development of high energy consumption, high emission and low-level projects. We should make great efforts to promote the optimization and upgrading of traditional industries such as iron and steel, nonferrous metals, petrochemical, chemical industry and building materials, and accelerate the innovation and digital transformation of low-carbon processes in the industrial field.
Industry profits grew steadily. In 2021, industrial enterprises above Designated Size achieved a total profit of 8709.21 billion yuan, an increase of 34.3% over the previous year, 39.8% over 2019 and an average increase of 18.2% over the two years. The non-metallic mineral products industry achieved a revenue of 6621.77 billion yuan, a year-on-year increase of 13.8%; The total profit was 558.74 billion yuan, a year-on-year increase of 14.3%..
Cement production will decline in 2021. In 2021, the cumulative output of cement in China was 2.363 billion tons, a year-on-year decrease of 1.2%. In 2021, the investment in infrastructure construction increased by 0.4% year-on-year, the investment in real estate development increased by 4.4% year-on-year, and the new construction area of houses decreased by 11.4% year-on-year. Due to the support of national policies for infrastructure construction, it is expected that the investment in infrastructure construction will rise in 2022, which will benefit the cement market demand.
Glass production will increase in 2021. In 2021, the annual output of flat glass reached 1.017 billion weight boxes, with a year-on-year increase of 8.4%. In 2021, the completed area of houses increased by 11.2% year-on-year, providing strong support for the demand of the glass industry. With the arrival of spring after the year, the completion end will pick up, the glass market demand is expected to increase, and the glass price will resume the upward trend.
Investment advice. In 2022, the building materials industry mainly focuses on the following investment directions: (1) leading consumer building materials that benefit from the improvement of industry concentration: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) (002271. SZ), Guangdong Kinlong Hardware Products Co.Ltd(002791) (002791. SZ), Zhejiang Weixing New Building Materials Co.Ltd(002372) (002372. SZ), ad shares (002641. Sz). (2) Glass fiber faucet benefiting from the increase of wind power demand: China Jushi Co.Ltd(600176) (600176. SH). (3) Glass faucets with multi service layout Zhuzhou Kibing Group Co.Ltd(601636) (601636. SH), Csg Holding Co.Ltd(000012) (000012. SZ). (4) Regional leaders of cement industry Huaxin Cement Co.Ltd(600801) (600801. SH), Gansu Shangfeng Cement Co.Ltd(000672) (000672. SZ) benefiting from the recovery of infrastructure investment. (5) The Jiangsu Pacific Quartz Co.Ltd(603688) (603688. SH) of high-purity quartz sand production capacity improvement. (6) Luyang Energy-Saving Materials Co.Ltd(002088) (002088. SZ) benefiting from the increased demand for ceramic fibers.
Risk warning: the risk that the new capacity of the industry exceeds the expectation; Risks of raw material price increase exceeding expectations, etc.
