Although everyone unanimously expected that there would be some performance after the A-share Festival, what I didn't expect was that the long lonely "old infrastructure" sector ignited the trigger of the rebound this week. During the holiday, the relevant person in charge of the national development and Reform Commission said that there were many uncertain factors in the first quarter of this year. We should appropriately move the policy starting point forward, make early arrangements, start early and achieve results, and meet various challenges with a stable economic operation situation. We will promptly introduce a series of policies and measures to implement the strategy of expanding domestic demand. Timely study and put forward targeted measures to revitalize industrial operation, moderately advance infrastructure investment, and strive to form more physical workload in the first quarter.
So why restart the "old infrastructure" at this time? It is also related to economic growth. As far as the current situation is concerned, the contribution rate of traditional infrastructure investment to China's economic growth is declining, from 43.2% in 2018 to 28.9% in 2019 and only 13.7% in 2021. The most obvious feeling is that the real estate market is decreasing. Meanwhile, in the fourth quarter of 2021, China's GDP growth fell to 4%, while that of the United States, which began to vigorously promote "old infrastructure", reached 6%. With the continued easing of China's monetary policy and the continued expansion of fiscal policy, the "old infrastructure", which can easily drive trillions of investment, has ushered in a good opportunity for development.
a steel:
this year will show a growth trend
The Ministry of industry and information technology and other three departments jointly issued the guiding opinions on promoting the high-quality development of the iron and steel industry on February 7. The opinions put forward that by 2025, the iron and steel industry will basically form a high-quality development pattern with reasonable layout and structure, stable resource supply, advanced technology and equipment, prominent quality brand, high intellectual level, strong global competitiveness, green, low-carbon and sustainable development. Strive to complete the ultra-low emission transformation of more than 80% of the steel production capacity by 2025, reduce the comprehensive energy consumption per ton of steel by more than 2%, and reduce the intensity of water resources consumption by more than 10%, ensure that the carbon peak will be reached by 2030, build more than 30 intelligent factories, and increase the proportion of electric furnace steel output in the total crude steel output to more than 15%.
Statistics show that in 2021, under the "three double" background of double control of production capacity and output, stricter control of energy consumption and double carbon target constraints, China's steel industry's total annual steel consumption was about 992 million tons, a year-on-year decrease of about 5.3%. This year is also a "big year" for the profits of the iron and steel industry. Statistics show that as of February 7, a total of 29 listed iron and steel companies in the two cities have issued performance forecasts for 2021, of which only one company is expected to lose money, three companies are expected to have a year-on-year decline in net profits, and 19 companies are expected to have a net profit of more than 1 billion yuan last year. Market participants said that the substantial increase in the profit of steel enterprises in 2021 was mainly due to the sharp rise in the average price of steel and the increase in the profit per ton of steel, which led to a significant increase in the overall profit.
Huabao Securities pointed out that on the whole, driven by the policy, it is expected that China's mines will enter a round of steady production expansion during the 14th five year plan, including the application and promotion of difficult beneficiation comprehensive separation and utilization technology, and the construction of China's resource guarantee capacity will be gradually strengthened. Focus on relevant listed companies focusing on iron ore business and mining machinery companies in the upstream of the industrial chain. It will help to further consolidate the industry's long-term global competitiveness under the current supply and demand fundamentals of the steel market. It is suggested to allocate two types of Companies: pay attention to the improvement of downstream infrastructure investment margin, bring about the rebound of demand for pipes and building materials, and relevant beneficiary companies; Considering the current low valuation of the steel sector, it is recommended to pay attention to listed companies with high long-term dividend level.
Company selection
\u3000\u3000 Baoshan Iron & Steel Co.Ltd(600019) (600019)
the company released the performance forecast for 2021. It is estimated that the net profit attributable to the shareholders of the listed company is RMB 23.58-23.98 billion, an increase of 86% - 89% over the same period of the previous year (RMB 12.68 billion), equivalent to EPS of RMB 1.06-1.08. The company has four manufacturing bases, including Baoshan in Shanghai, Qingshan in Wuhan, Dongshan in Zhanjiang and Meishan in Nanjing, with a total crude steel production capacity of more than 48 million tons. From the perspective of profitability per ton of steel, although Baoshan base has always led with differentiated advantages, Dongshan base benefits from the continuous optimization of variety structure while maintaining the original cost advantage, and Dongshan's profitability has a great potential to catch up with and surpass Baoshan. Ten million ton cold-rolled automobile sheet and five million ton silicon steel are the flagship products of Baosteel, and their contributions to the company's gross profit are 25% and 20% respectively. Baosteel's cold-rolled automobile sheet has maintained a market share of more than 50% for many years, and high-strength steel will be the focus of the company's automobile sheet development in the future. Zhongtai Securities Co.Ltd(600918) it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 23.8 billion yuan, 16.1 billion yuan and 19.5 billion yuan respectively, equivalent to EPS of 107 yuan, 0.72 yuan and 0.87 yuan, maintaining the "overweight" rating.
\u3000\u3000 Fushun Special Steel Co.Ltd(600399) (600399)
The fundamental trend of company's two machine industry has not changed. The two aircraft track "aeroengine + gas turbine" is the best track with thick snow on the middle and long slopes in the field of military industry. It is a typical competition track with large space for long-term growth, high barriers and good pattern. Fuzhou iron and Steel Co., Ltd. is the core slot enterprise on many racetracks such as aeroengines, missiles and military aircraft, and its scarcity of supply has not changed. Fushun Special Steel Co.Ltd(600399) accounts for more than 80% of China's aerospace deformed superalloy market, and is the core card enterprise of the aviation development track; High strength steel accounts for more than 95% of the market, Fushun Special Steel Co.Ltd(600399) takes the lead in the R & D and production of A100 steel and 300M steel in China. The products are widely used in key components such as aircraft landing gear, aeroengine shaft, missile and ship shell. Therefore, Fuzhou iron and Steel Co., Ltd. is also the core supplier of "military aircraft, missile" and other products. The large-scale loading of military aircraft and missile will also drive the continuous growth of high-strength steel demand. Guosheng Securities believes that the long-term sustainable growth of Fuzhou iron and Steel Co., Ltd. has high certainty, and the key lies in the rhythm of production expansion. In the next 5-7 years, Fuzhou iron and Steel Co., Ltd. has a continuous driving force to maintain 30% - 50% performance growth.
\u3000\u3000 Citic Pacific Special Steel Group Co.Ltd(000708) (000708)
the company released the performance forecast for 2021. It is estimated that the operating revenue in 21 years will be 98.57 billion yuan, with a year-on-year increase of 29.43%; The net profit attributable to the parent company was about 7.951 billion yuan, a year-on-year increase of 31.82%. The production capacity of the company is huge, and the downstream is relatively scattered. High end equipment manufacturing industries such as automobile, engineering machinery, military aviation, oil exploitation and energy are involved. The demand fluctuation of a single industry has little impact on the overall sales of the company. In the long run, as the cornerstone of high-end manufacturing, the special steel industry has broad space for long-term import substitution and will be improved in the future. At present, the company has a production capacity of more than 14 million tons of special steel. It is the largest leading enterprise among the listed special steel companies. It is expected to obtain a competitive advantage in the era of long-term growth of special steel.
In 2022, the company's target of high-temperature alloy + high-strength steel is 10000 tons, and the long-term target is 20000 tons. Sinolink Securities Co.Ltd(600109) it is estimated that the company's revenue from 2021 to 2023 will be 98.42 billion yuan, 98.74 billion yuan and 102.08 billion yuan respectively, and the net profit attributable to the parent company will be 7.96 billion yuan, 8.86 billion yuan and 9.68 billion yuan respectively, maintaining the "overweight" rating.
B cement:
demand improvement is expected to achieve excess return
On the first trading day after the festival, the performance of the cement sector was eye-catching, Gansu Shangfeng Cement Co.Ltd(000672) , Yunnan Bowin Technology Industry Co.Ltd(600883) , Huaxin Cement Co.Ltd(600801) , Xinjiang Tianshan Cement Co.Ltd(000877) , Jiangxi Wannianqing Cement Co.Ltd(000789) , Sichuan Shuangma Cement Co.Ltd(000935) and so on. Recently, the Ministry of industry and information technology issued the "14th five year plan" for the development of raw material industry, which proposed that by 2025, cement and other raw materials will form 5 to 10 leading enterprises in the industrial chain with ecological leadership and core competitiveness, and form more than 5 world-class advanced manufacturing clusters in the field of raw materials.
Zhongtai Securities Co.Ltd(600918) believes that the stable growth cycle of the resumption of trading in recent ten years is an important layout time point. After the policy setting, the market has an upward trend under the influence of policy expectations, and the cement sector can achieve about 10% excess return. The time node of this steady growth cycle is more similar to that of 2011. The timing point of steady growth is the central economic work conference in December, followed by a period of economic data window, which means that before the economic data disclosure in March, the cement sector is expected to benefit from steady growth and realize excess returns. Therefore, it is an important layout timing point of the cement sector at present. Tianfeng Securities Co.Ltd(601162) it is also expected that there will be marginal improvement in demand in the first half of 2022, and the valuation may be repaired first. On the demand side, it is expected that there will be marginal improvement at the infrastructure side in the first quarter of 2022, the bottom of the real estate side will pick up, and the demand is expected to begin to improve.
Statistics show that in 2021, the national net new production capacity was 7 million tons (a year-on-year increase of 0.4%), and the new production capacity decreased. In the context of shrinking demand, enterprises are expected to strengthen their willingness to cooperate on the supply side in order to maintain the steady development of the market, and areas with poor supply pattern in the past, such as Yunnan, Guizhou and Northeast China, have been significantly improved. In 2022, the cement demand is expected to decline slightly, but maintain a high platform period. The willingness of supply coordination is expected to increase instead of decrease. The annual output is expected to decline in single digits year-on-year, and the total volume will remain more than 2 billion tons.
From the perspective of price, the average price of high-standard cement in China remains high. From the perspective of cost, it is expected that the cement price center will be stable and the profitability will be improved in 2022.
Company selection
\u3000\u3000 Huaxin Cement Co.Ltd(600801) (600801)
the price trend of the company's regional cement market presents a V-shaped reversal. In the medium term, strict supply side constraints and demand repair are expected to support the upward trend of the cement boom, and the increment of aggregate and concrete continues to contribute. In the short term, the rapid rise in the price of basic materials has formed a phased restriction on the release of downstream demand, but the state of strict supply restriction of the industry under the influence of dual control of energy consumption and power restriction policy has not fundamentally changed. The overall inventory of the industry fluctuates at a low level, and the supply continues to be in short supply. The efforts to stabilize growth are superimposed to strengthen the repair of demand, It will support the cement price center in the medium term, which is higher than that in the same period of previous years. Guosheng securities expects the company to have considerable profit elasticity from Q4 in 2021 to the first half of 2022. Aggregate production capacity is growing rapidly, and the expansion of concrete integration mode is accelerated. With the production capacity under construction put into operation and the base climbing, the subsequent aggregate and commercial concrete sales are expected to continue to grow rapidly. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 5.7 billion yuan, 6.9 billion yuan and 7.47 billion yuan respectively, corresponding to 6.2, 5.1 and 4.7 times P / E ratio, maintaining the rating of "overweight".
\u3000\u3000 Jiangxi Wannianqing Cement Co.Ltd(000789) (000789)
company is the leader of cement in East China, and its business is concentrated in the local area of Jiangxi. The annual clinker production capacity is 15 million tons and cement production capacity is 26 million tons, ranking first in Jiangxi Province. The capacity utilization rate of the company's clinker production exceeds 100%, and the cement capacity utilization rate exceeds 90%. While steadily developing the cement business, the company actively expands the industrial chain. At present, nearly 30 commercial concrete enterprises are deployed in the province, with a production capacity of 17 million m3 of commercial concrete and 9 million tons of aggregate, creating multiple profit growth points for the company. The company's cement products sell well in most areas of Southern Jiangxi, Eastern Jiangxi and northern Jiangxi, as well as surrounding provinces such as Fujian, Zhejiang and Guangdong. The market share of cement and commercial concrete products in Jiangxi ranks in the forefront. Tianfeng Securities Co.Ltd(601162) it is considered that the comprehensive cost per ton of cement clinker of the company in 2020 is 193 yuan / ton, which is at a low level among comparable companies. For the first time, the company will be given a "buy" rating. We expect that the company's net profit attributable to the parent company in 21-23 years will be RMB 1.78/20.9/2.36 billion, and the company will be given a target PE of 7 times in 21 years, corresponding to the target price of RMB 15.68. For the first time, the company will be given a "buy" rating.
\u3000\u3000 Anhui Conch Cement Company Limited(600585) (600585)
through the T-type development strategy, the company has continuously reduced the costs of raw materials, transportation, fuel and electricity, and realized that the comprehensive cost is lower than the industry average level. At the same time, the excellent operation ability has reduced the three fee level, so that the company has the core advantages of low cost and high profit. Sealand Securities Co.Ltd(000750) believes that the concentration of the cement industry has increased significantly in recent years, and the voice and coordination ability of leading enterprises have been improved. At the same time, it has alleviated the past malicious competition situation, objectively raised the cement price, and finally benefited the leading enterprises. In the context of mine resource utilization, the concentration of the whole cement industry chain has increased, and the company has sufficient mine resources. It is conservatively estimated that the actual value is about 50 billion yuan, which provides strong support for the company to extend the industrial chain, fully develop aggregate and gravel business, expand overseas business, and consolidate and strengthen the leading position of the industry. It is predicted that the company's EPS from 2021 to 2023 will be 6.47 yuan, 6.96 yuan and 7.04 yuan respectively, and the corresponding PE will be 6.23x, 5.79x and 5.72x respectively. "Overweight" rating is given for the first time.
C sponge City:
preferred for new urbanization
Sponge city is a new generation of urban rainwater and flood management concept, which means that the city can be like a sponge and has good flexibility in adapting to environmental changes and dealing with natural disasters caused by rainwater. It can also be called "water elastic city". The international common term is "construction of rainwater system for low impact development". When it rains, it absorbs, stores, seeps and purifies water, and releases and uses the stored water when necessary, so as to realize the free migration of rainwater in the city. Starting from ecosystem services, the core of sponge city is to build water ecological infrastructure through cross-scale construction and combined with various specific technologies.
The latest research report of Guotai Junan Securities Co.Ltd(601211) Securities believes that urban waterlogging occurs frequently, and the construction of sponge city is imperative. Under the triple pressure of shrinking demand, supply shock and weakening expectation, the willingness to support the fiscal bottom will be stronger in 2022. The construction of sponge city has entered the popularization and promotion period, and a new round of selection of construction demonstration cities in 2021 may once again catalyze the investment in sponge city. During the 13th Five Year Plan period, the investment in sponge cities is expected to be 1.9 trillion, and the cumulative investment scale is expected to increase to 7 trillion from 2020 to 2030.
The consortium model has become a trend, and the ability of local governments to build sponge cities has been improved. After the peak period of sponge city projects in 2016-2017, there were few new investment projects, mainly due to the weak repayment ability of sponge city projects, the shortage of local finance and the decline of willingness of social capital to participate. Guotai Junan Securities Co.Ltd(601211) believes that more operational water treatment assets need to be included in the new projects in sponge city in the future to enhance the willingness of social capital to participate. For example, in the sponge city project, increase the rainwater collection and utilization project that provides the supply of new water resources, increase the multi-functional regulation and storage and ecological park that can provide ticket income, toll ecological parking lot, etc.
Company selection
\u3000\u3000 Zhejiang Weixing New Building Materials Co.Ltd(002372) (002372)
the company is mainly engaged in the production and sales of plastic pipes. Its main products include three pipe fittings series: PPR (cold and hot water supply in buildings), PE (municipal water supply, heating, gas, drainage and sewage), PVC (drainage and sewage, power sheath). In recent years, with "water" as the core, the company has continuously extended the "concentric circle product chain" and accelerated the promotion of home decoration waterproof and water purification business. The company has an annual production capacity of more than 300000 tons and a total of 6 production bases. At present, it has more than 29000 marketing outlets, more than 30 sales branches and more than 1700 salespeople in China; Engineering business accounts for about 30%. Through direct sales + distribution, it maintains good cooperative relations with water supply companies, gas companies, HVAC companies, well-known real estate companies, etc. Minsheng securities expects the net profit attributable to the parent company from 2021 to 2023 to be 1.243 billion yuan, 1.604 billion yuan and 1.924 billion yuan respectively, and the corresponding dynamic PE is 30x, 23x and 20x respectively. According to the relative valuation method, the company will be given 31xpe in 2022, with a reasonable market value of about 50 billion yuan. It will be covered for the first time and given a "recommended" rating.
\u3000\u3000 Focused Photonics (Hangzhou) Inc(300203) (300203)
the company is the leader of domestic analytical instruments, expanding the layout of life sciences. Domestic substitution is expected to increase the market share. As the leader of domestic analytical instruments, the company actively cuts into the fields of life sciences and semiconductors, and the original market space is expected to increase from 40 billion in the field of environmental monitoring to 100 billion. The company's growth path is benchmarked to overseas giants SEMER Fisher and Danaher. In recent 20 years, the company has continued to increase its weight at the R & D end, and its technology continues to lead its Chinese peers. With the expansion of downstream fields, domestic substitution and the further improvement of the concentration of domestic instrument industry, the market share still has a large room for improvement. Zheshang Securities Co.Ltd(601878) believes that the company is still in the R & D investment period. The R & D expenditure of the company in the first three quarters was 410 million yuan, accounting for about 20% of the company's revenue. It is estimated that the company's net profit attributable to the parent company from 2021 to 2023 will be 140 million yuan, 350 million yuan and 450 million yuan respectively, with a year-on-year increase of - 72% / 153% / 28%. As the leader of domestic analytical instruments, the company actively distributes the fields of life science, clinical and medical treatment, and maintains the "overweight" rating of the company.
\u3000\u3000 Chongqing Water Group Co.Ltd(601158) (601158)
by the first half of 2021, the company's water supply enterprises have 29 water systems (water plants), with a production capacity of 2.7375 million m3 / day, an increase of 12% over the end of 2020; There are 108 sewage treatment plants put into operation by drainage enterprises, and the daily treatment capacity of sewage treatment business is 4.2408 million m3 / day, an increase of 19% over the end of 2020; There are 8 sets of sludge treatment systems, with a daily design sludge treatment capacity of 1992 tons, a decrease of 3.9% compared with the end of 2020. The company also won the bid for the comprehensive water conservancy infrastructure project (PPP) in Anning City, Yunnan Province. The operation period is 12 years. It is divided into two categories: comprehensive water environment improvement project and human drinking project, including the comprehensive water environment improvement project of Shahe River, the diversion pipeline construction project of Chemuhe reservoir in Anning City (phase III), waimawan water purification plant and pipe network project of Wenquan, The successful bid of the project indicates that the company will further break through the existing business area restrictions and open a new business market. Southwest Securities Co.Ltd(600369) it is estimated that the company's EPS from 2021 to 2023 will be 0.40, 0.43 and 0.47 yuan respectively, maintaining the "hold" rating.
