At the current time point, we continue to be optimistic about the spring market of infrastructure: 1) at present, it is a rare infrastructure boom cycle with complete demands of projects + funds + local governments, and the growth rate of infrastructure investment is expected to exceed expectations; 2) The performance of local state-owned enterprises is highly flexible and gradually recognized by the market; 3) The REITs policy was significantly promoted, and the valuation of infrastructure central enterprises with more operating assets ushered in the opportunity to repair. In the medium and long term, BIM, BIPV and other transformation logic have gradually entered the cashing period and are optimistic about the value discovery of the leader.
From a micro perspective, the infrastructure orders of large-scale construction central enterprises exceeded expectations
In January, China State Construction Engineering Corporation Limited(601668) new orders were 298.8 billion yuan, a year-on-year increase of 13.1%, of which 232.7 billion yuan, 48.7 billion yuan and 1 billion yuan were newly signed for housing construction, infrastructure construction and design, a year-on-year increase of 12.6%, 68.1% and – 3.1% respectively. In January, China National Chemical Engineering Co.Ltd(601117) new orders were 51.15 billion yuan, a year-on-year increase of 83.0%, of which 11.17 billion yuan was newly signed for infrastructure construction, We expect that the year-on-year growth rate of infrastructure orders is consistent with the year-on-year growth trend of overall orders, which mainly represents that the infrastructure orders of central enterprises in January have verified the characteristics of Q1 infrastructure force from the micro level.
In the 13th five year plan, the Ministry of housing and urban rural development still focuses on “accelerating the use of BIM Technology” and “accelerating the R & D and promotion of domestic software”, while the 14th five year plan focuses on the construction of BIM technical framework and standard system, “accelerating the preparation of standards such as data interface and information exchange”, “Guide enterprises to establish BIM cloud service platform” and “BIM based regional management system”. The construction of BIM has gradually developed from the original point development to the direction of standardization, platform and cloud. At the same time, “carry out BIM application and approval pilot”, promote the integration and linkage between Bim and urban information model (CIM) platform, and improve the ability of information supervision, We expect that the development of Bim in the 14th Five Year Plan period is expected to usher in a new stage of development. On February 17, Shenzhen Capol International&Associatesco.Ltd(002949) announced that it had signed a joint venture agreement on the establishment of a joint venture with Zwsoft Co.Ltd(Guangzhou)(688083) a Chinese CAD leader to jointly establish a joint venture to carry out domestic BIM product R & D and software sales, of which Huayang held 30%. We believe that this cooperation fully proves Huayang’s market leading position in the field of BIM application level development. In addition to improving the efficiency of the company’s design business, the subsequent company’s BIM application will also accelerate the pace of software commercialization, accelerate the transformation from simple design to the business model of “design + software R & D and sales”, and look forward to the core + Huayang secondary development, It is expected to achieve a rapid breakthrough in the field of BIM software.
Market Review
Last week, the construction (CITIC) index rose 3.07%, the CSI 300 index rose 0.75%, and all the three sub sectors rose except the housing construction sector, among which the garden and decoration sectors led the rise, recording positive gains of 9.83% and 8.66% respectively. Among the stocks, Hangzhou Landscape Architecture Design Institute Co.Ltd(300649) (+ 92.29%), Chengbang Eco-Environment Co.Ltd(603316) (+ 61.13%), Yuancheng Environment Co.Ltd(603388) (+ 38.24%), Ningbo Construction Co.Ltd(601789) (+ 28.54%) and Hanjia Design Group Co.Ltd(300746) (+ 26.68%) led the increase.
Investment advice
Under the medium and long-term growth dimension of “construction +” leader, enterprises with “new energy” and “chemical” industries have gradually entered the performance cashing period, and their performance is expected to grow high. Under the dimension of valuation restoration of value varieties, the leaders of local state-owned enterprises are expected to enjoy the high boom of regional infrastructure. The profit elasticity brought by the improvement of operating efficiency has initially appeared. There are both opportunities for steady growth and report quality improvement in the medium and long term. The increase of market share of central enterprises supports the continuous growth of revenue. After the completion of leverage reduction, roe still has obvious upward elasticity, With the continuous strengthening of the profit release ability and willingness of central enterprises, they also have strong elasticity of valuation repair.
Risk tips: Infrastructure & real estate investment went down more than expected, new energy & chemical business expansion was less than expected, the concentration of assembled leaders was less than expected, and the progress of efficiency improvement in the reform of central enterprises and state-owned enterprises was less than expected.
