Key investment points
This week (January 24, 2022 – January 30, 2022, the same below): the building materials sector (SW) rose or fell by - 5.49% this week. In the same period, the Shanghai and Shenzhen 3 million and wandequan a index rose or fell by - 4.51% and - 5.01% respectively, and the excess return was - 0.98% and - 0.48% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the national high-standard cement market price this week was 518 yuan / ton, the same as last week, and + 75 yuan / ton compared with the same period in 2021. There was no increase in prices compared with last week; There are no areas where prices fall. The average cement warehouse location of the national sample enterprises this week was 62.5%, which was + 0.6pct compared with last week and + 5.2pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity in process) of the national sample enterprises was 8.4%, which was - 15.7pct compared with last week and - 15.2pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of the national float white glass original sheet is 2099 yuan / ton, which is + 33 yuan / ton compared with last week and - 58 yuan / ton compared with the same period in 2021. According to the statistics of Zhuo Chuang information, the original film inventory of sample enterprises in 13 provinces in China was 35.1 million heavy boxes, up from - 480000 heavy boxes last week and + 10.39 million heavy boxes over the same period in 2021. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn was 6150 yuan / ton, the same as last week, and + 450 yuan / ton compared with the same period in 2021.
Zhou viewpoint
Last week, the market was mainly callback, and the steady growth chain performance was relatively stable. With the centralized release of performance forecast, the risk of bad debt provision for decoration and building materials was basically released. In addition to the restoration of the post real estate industrial chain, we believe that the continued strengthening of the demand for stable growth and the continuous development of multiple measures for stable growth will promote the recovery of infrastructure investment in the first half of 2022 and continue to be optimistic about the high winning rate of the municipal infrastructure chain. New infrastructure, affordable housing construction, urban pipeline transformation and construction are the focus of the new round of infrastructure development. We continue to be optimistic about the pre and medium cycle varieties with underestimated values such as cement and pipe materials.
In terms of bulk building materials: the growth rate of infrastructure has picked up under the force of fiscal policy, the policies of affordable housing and guaranteed housing have stabilized the expectation of real estate investment, and the PMI of construction industry in January 2022 also reflected that the construction expectation after the year is optimistic. Based on the extension of peak staggering and the strengthening of industry self-discipline, we calculate that the supply capacity of the industry after eliminating peak staggering will decrease by 0.1% year-on-year in 2022. With the support of stable investment on demand, the cement boom can still maintain a high level, and the peak season has a certain price elasticity. The dividend yield of 5 ~ 9% in 2021 makes the current price earnings ratio of 6 ~ 7 times have room to repair. It is suggested to pay attention to Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) with strong performance certainty, bright spots in the extension of medium and long-term industrial chain, Guangdong Tapai Group Co.Ltd(002233) , Jiangxi Wannianqing Cement Co.Ltd(000789) with high dividend yield, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) which are expected to benefit from the integration of the northern market and great business elasticity.
In terms of decoration and building materials: we expect the infrastructure chain to grow steadily and counter cyclical adjustment to boost demand. Recently, the central government mentioned that the new special debt focuses on water conservancy, transportation, municipal infrastructure construction, affordable housing projects and other fields. The Ministry of water resources mentioned the implementation of major projects of the national water network. We expect the construction of underground pipe network and sponge city to bring sustainable increment during the 14th Five Year Plan period. The completion end of the real estate remained resilient, but the new construction and sales remained weak. In terms of real estate, the easing signal has been gradually released, and the bottom of the policy has been found. We expect that the financing end of subsequent real estate enterprises and consumers is expected to be slightly relaxed. In addition, accelerating the construction of affordable rental housing during the 14th Five Year Plan period will bring some increment. Previously, the valuation of the decoration and building materials sector has been in the lower position of the historical center due to the slowdown in demand, the rise of raw materials and cash flow pressure. With the relaxation of expectations on the edge of real estate, the decline of high raw material costs, and the gradual release of bad debt provision and cash flow risk expectations, the overall sector is expected to usher in performance and valuation repair. It is recommended to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , and China Liansu, Yonggao Co.Ltd(002641) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Keshun Waterproof Technologies Co.Ltd(300737) , Jiangsu Canlon Building Materials Co.Ltd(300715) , Monalisa Group Co.Ltd(002918) , Zhejiang Walrus New Material Co.Ltd(003011) .
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
