Local bonds were boosted, medium and long-term corporate loans turned upward, and the inflow of new social finance into infrastructure funds increased significantly in January. The central bank announced that social finance increased by 6.17 trillion yuan in January, an increase of 984.2 billion yuan year-on-year, exceeding market expectations; Financial institutions increased RMB loans by 3.98 trillion, an increase of 400 billion yuan year-on-year, reversing the trend of year-on-year decrease for two consecutive months; The growth rate of social finance stock increased from 10.3% at the end of last year to 10.5%, and there are obvious signs of credit easing. The amount of capital invested in infrastructure construction in new social finance cannot be obtained directly. According to the calculation framework we have built, it is assumed that the index consists of local bonds, corporate loans, corporate bonds and non-standard:
1) among the newly increased local bonds, the part invested in infrastructure. According to the investment data of newly increased special bonds last year, it is estimated that about 70% of the newly increased special bonds in January will be invested in infrastructure. It is estimated that the scale of this part is about 421.8 billion yuan, an increase of 251.2 billion yuan year-on-year;
2) the medium and long-term loans of new non-financial companies were invested in infrastructure (flowing to financing platforms, project loans, or construction enterprises). In January, the medium and long-term loans of new non-financial companies were 2.1 trillion, an increase of 60 billion yuan year-on-year, reversing the trend of significant year-on-year decrease in each month for the past six consecutive months. Assuming that the proportion flowing to infrastructure, real estate and manufacturing is roughly the proportion of investment in the three major industries (infrastructure investment accounts for about 35%, and the proportion of investment in infrastructure in the medium and long-term loans of newly added non-financial companies should be higher than 35% under the condition of poor financing of real estate enterprises and cautious expansion of manufacturing industry), it can be estimated that the part flowing into infrastructure in January is about 735 billion yuan, an increase of 21 billion yuan year-on-year;
3) in the new corporate bond financing, the capital construction was invested. In January, the net financing amount of “building decoration / public utilities / transportation / comprehensive” in Shenwan industry credit bonds was 1695 / 341 / 640 / 129.2 billion yuan respectively. Assuming that 70% / 100% / 100% / 50% of them were invested in capital construction, the capital construction was invested in about 281.4 billion yuan in the new corporate bond financing in January, an increase of 26.7 billion yuan year-on-year;
4) the newly added non-standard medium investment in infrastructure is assumed to be the same as the proportion of investment in infrastructure in Item 2). In January, the scale of this part contracted by 8.8 billion yuan, a year-on-year decrease of 17.5 billion yuan.
After summing up the above four items, the new social finance inflow of infrastructure funds in January was about 1.43 trillion yuan, an increase of 316.4 billion yuan year-on-year (the same increase of 28%), and an increase of 492.7 billion yuan month on month (an increase of 53%) over December. In January, the new social finance investment turned upward to the inflection point of infrastructure growth. At the same time, considering that this index has continued to have a certain foresight on the growth rate of infrastructure investment in history, the certainty of infrastructure investment improvement has increased.
The relaxed environment is conducive to the promotion of infrastructure projects, and we continue to recommend steady growth mainline investment opportunities. Since the end of last year, a series of important meetings have continued to demonstrate China’s determination to stabilize growth. Infrastructure, as a government led investment field, is expected to bear fruit in a relatively short period of time. In the first half of the year, it will play a pillar role in stabilizing growth, and the credit environment of the superimposed industry tends to improve. The promotion of infrastructure projects is expected to accelerate, the industry boom is expected to improve, and the sector welcomes the driving force of valuation improvement, Continued focus: 1) undervalued infrastructure blue chips: core recommendations China Communications Construction Company Limited(601800) (pe7.2x), China State Construction Engineering Corporation Limited(601668) (pe4.2x), Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (pe13x), China Railway Group Limited(601390) (pe5.2x), China Railway Construction Corporation Limited(601186) (pe4.1x), China Energy Engineering Corporation Limited(601868) (pe13x); 2) High business elasticity direction: a) infrastructure design: infrastructure development, design first, with emphasis on China Design Group Co.Ltd(603018) (pe9x), Anhui Transport Consulting & Design Institute Co.Ltd(603357) (pe12x), Henan Provincial Communications Planning & Design Institute Co.Ltd(300732) (pe13x); b) Steel structure: steel structure continues to benefit from capital construction improvement and manufacturing investment repair, with emphasis on Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) (pe12x), Anhui Honglu Steel Construction(Group) Co.Ltd(002541) (pe20x); c) Affordable housing: Recently, the central bank informed that the loans related to affordable rental housing will not be included in the concentration management of real estate loans, and the industry development is expected to enter an accelerated period. It is recommended that Shenzhen Capol International&Associatesco.Ltd(002949) (pe14x); d) New power system: the private distribution network EPCO leader Suwen Electric Energy Technology Co.Ltd(300982) (pe23x) is recommended.
Risk tip: the implementation of steady growth policy is less than expected, the risk of shrinking the scale of social finance, the risk of epidemic impact exceeding expectations, etc.
