Market Review
In the five trading days last week (0207-0211), the building materials (CITIC) index rose 6.6% and the CSI 300 rose 0.8%. Benefiting from the steady growth and the sharp rise of relevant industries, the building materials sub sectors achieved good gains, and the varieties of infrastructure and real estate chain increased significantly. Among individual stocks, Guangdong Sanhe Pile Co.Ltd(003037) , Shandong Longquan Pipeline Engineering Co.Ltd(002671) , Xinjiang Guotong Pipeline Co.Ltd(002205) , Zhengwei new material, Huaxin Cement Co.Ltd(600801) led the increase.
Favorable policies / funds continue to be released, and we continue to be optimistic about the main line of steady growth investment
Last week, PCCP, cement and other infrastructure related building materials, as well as real estate chain building materials increased significantly. We think the reasons are as follows: 1) on January 30, the sales of first-hand houses in the city and the sales of second-hand houses in representative cities continued to decline significantly year-on-year (refer to the previous weekly report). The introduction of REITs tax supporting policies before the festival strengthened the market’s expectation of stable growth of infrastructure. 2) According to the 21st century financial report, the supervision requires local governments to make up a number of special debt projects, focusing on urban pipe network and water conservancy; 3) Social finance data in January exceeded market expectations; 4) The introduction of regulatory opinions on real estate pre-sale funds is expected to alleviate the capital pressure of real estate enterprises.
We believe that the main line of steady growth of building materials is expected to continue to focus on infrastructure and real estate: 1) in the short term, the fundamentals of building materials in the infrastructure chain are expected to benefit from steady growth or more significantly, the leaders in strongly related sub sectors such as infrastructure pipe network are expected to reflect the high growth of income and profits, and the sectors with a high proportion in the downstream of infrastructure such as cement are also expected to show fundamental improvement and valuation repair; 2) The current favorable policies of the real estate chain occur frequently, and the improvement of the policy end in the future is expected to gradually transform to the fundamentals. Glass is expected to benefit from the acceleration of resumption of work after the festival and the increase of product prices. The base of consumer building materials in the same period last year is high, and the recovery of fundamentals is more obvious after Q2, but the valuation repair opportunities brought by policy catalysis are still worthy of attention.
Actively grasp the restless market of the Spring Festival and recommend the consumption of building materials / pipes / glass cement, etc
1) influenced by the prosperity of real estate, capital chain and cost pressure last year, the above factors are expected to gradually improve. In the medium and long term, the leading companies have started channel reform, and the scale effect is expected to continuously improve the industry concentration, both long and short; 2) The downstream of the plastic pipeline sector has both infrastructure and real estate. The infrastructure end is expected to benefit from the warming of municipal pipe network investment, and the logic of the real estate end is similar to that of consumer building materials; 3) Cement is expected to benefit from the improvement of follow-up infrastructure and real estate demand. In the medium and long term, the supply pattern is expected to be continuously optimized; 4) At present, the market value of the leading glass enterprises is at a low level. At present, they are in the period of accelerated resumption of work in spring, and the glass price is expected to gradually rise. This year, the overall supply and demand of the industry may still be in a tight balance, the unit profit of float glass is expected to be relatively stable, photovoltaic glass is expected to benefit from the recovery of the industrial chain, and electronic glass is expected to benefit from the large volume of new products such as domestic substitutes and folding screens; 5) The demand side of glass fiber is driven by the downstream of wind power and overseas, and the increment on the supply side is limited.
Investment advice
Recommendations for consumer building materials Monalisa Group Co.Ltd(002918) , Dehua Tb New Decoration Material Co.Ltd(002043) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) ; China Liansu, Shandong Donghong Pipe Industry Co.Ltd(603856) , ad Co., Ltd. are recommended for the pipeline; Recommended cement Gansu Shangfeng Cement Co.Ltd(000672) , Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Jiangxi Wannianqing Cement Co.Ltd(000789) ; Glass recommended Triumph Science & Technology Co.Ltd(600552) , Zhuzhou Kibing Group Co.Ltd(601636) , Xinyi Glass, etc; Recommended China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) for glass fiber;
Risk tip: the demand for infrastructure and real estate fell more than expected, affecting the rising trend of cement and glass prices; The promotion of old reform and new urbanization was less than expected.
