Investment in infrastructure was moderately advanced and supported by multiple departments. In 2021, the growth rate of China’s broad infrastructure investment was 0.21%, and the cumulative growth rate from January to December increased by 0.38pct month on month. Since the central economic work conference was held, the Ministry of finance, the national development and Reform Commission and the China Banking and Insurance Regulatory Commission have expressed their support for infrastructure investment in advance. At the same time, Ning Jizhe, director of the National Bureau of statistics, said that policies such as moderately advanced infrastructure investment are making efforts. Looking forward to 2022, it is expected that the growth rate of infrastructure investment is expected to rebound to 5% in the first half of the year and 3% in the whole year.
The construction speed of affordable housing is expected to accelerate in 2022. On January 20, 2022, the National Conference on housing and urban and rural construction was held in Beijing. The conference called for vigorously increasing the supply of affordable rental housing in 2022, focusing on large cities with net population inflow, and raising 2.4 million affordable rental housing throughout the year. Compared with 942000 newly raised affordable rental housing units in 40 cities in China in 2021, the construction speed of affordable housing is expected to accelerate in 2022.
Launch the issuance of special bonds in the first quarter in many places. Recently, several local governments have successively announced plans for issuing local bonds in the first quarter. Henan Province has successfully issued the country’s first local government special bonds of 38.201 billion yuan in 2022, and Sichuan Province has also successfully issued the first batch of special bonds of 37.7 billion yuan this year. According to several policies and measures for expanding effective investment and stabilizing economic development in Shanghai in 2022, Ensure that the issuance of 2022 local government special bonds issued by the Ministry of Finance in advance is completed in the first quarter, and strive to complete the issuance of all local government special bonds in the first half of the year. The issuance of special bonds accelerated in the first quarter, forming an important support for infrastructure investment.
The performance and concentration of the industry are expected to continue to improve. The market share of newly signed orders of the eight central construction enterprises increased from 24.38% in 2013 to 39.44% in the first three quarters of 2021. The concentration of the construction industry is expected to continue to improve. The construction index PE is 10.41 times, and the 10-year historical quantile is 32.94%, with a high safety margin. It is suggested to pay attention to investment opportunities in infrastructure, assembly building, green building, carbon neutralization and other fields. Recommended China Railway Construction Corporation Limited(601186) (601186. SH), China Communications Construction Company Limited(601800) (601800. SH), China Railway Group Limited(601390) (601390. SH), Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (601669. SH), China Energy Engineering Corporation Limited(601868) (601868. SH), Metallurgical Corporation Of China Ltd(601618) (601618. SH), China National Chemical Engineering Co.Ltd(601117) (601117. SH), China State Construction Engineering Corporation Limited(601668) (601668. SH), Shandong Hi-Speed Road&Bridge Co.Ltd(000498) (000498. SZ), etc. It is recommended to pay attention to Anhui Honglu Steel Construction(Group) Co.Ltd(002541) (002541. SZ), Shanghai Construction Group Co.Ltd(600170) (600170. SH), Shanghai Tunnel Engineering Co.Ltd(600820) (600820. SH), Sinosteel Engineering & Technology Co.Ltd(000928) (000928. SZ), Sichuan Road & Bridge Co.Ltd(600039) (600039. SH), Arts Group Co.Ltd(603017) (603017. SH), etc.
Risk warning: the risk of decline in fixed asset investment; The risk that the recovery of accounts receivable is less than expected; Risk of new orders falling short of expectations.
