The rise of the construction sector outperformed the market this week. In December, infrastructure investment recovered, real estate investment continued to decline, construction fell, completion improved, and real estate sales decreased year-on-year. A joint venture was established between Shenzhen Capol International&Associatesco.Ltd(002949) and Zwsoft Co.Ltd(Guangzhou)(688083) . The aluminum formwork industry report was released in 2021, and the industry concentration continued to increase.
The overall rise of construction outperformed the market, and the segments generally rose: this week, the Shenwan construction index closed at 2427.2 points, up 3.5% month on week, outperforming the market. The industry’s average price to book ratio was 1.0 times, basically unchanged from last week. Subdivided sectors generally rose, among which the garden sector rose by 12.2%, with the largest increase; The consulting sector rose 2.0%, the smallest increase.
Shenzhen Capol International&Associatesco.Ltd(002949) and Zwsoft Co.Ltd(Guangzhou)(688083) set up a joint venture. In 2021, the aluminum formwork industry report was released, and the industry concentration continued to improve: on February 18, Shenzhen Capol International&Associatesco.Ltd(002949) announced that it planned to establish a joint venture with Zwsoft Co.Ltd(Guangzhou)(688083) to carry out the business of “domestic BIM (building information model) product R & D and software sales”, with Shenzhen Capol International&Associatesco.Ltd(002949) holding 30%. Shenzhen Capol International&Associatesco.Ltd(002949) as an architectural design enterprise that carried out BIM special research earlier in China, its BIM business is expected to make great progress under the policy requirements of actively promoting the development of building informatization. On February 16, China capital construction materials leasing and contracting Association released the development report of China State Construction Engineering Corporation Limited(601668) aluminum alloy formwork industry in 2021. According to the statistical calculation of the association, by the end of December 2021, the turnover and use of building aluminum alloy formwork in China was 70.5 million square meters, an increase of 13.7% compared with 2020; There are more than 700 enterprises engaged in R & D, design, production, processing and leasing of aluminum alloy formwork for buildings above Designated Size in China, which is lower than that in 2020 (more than 800); In 2021, the revenue from the production, sales and lease contracting of building aluminum alloy formwork in China was 38.3 billion yuan, an increase of 5.2% over 2020. The market scale of aluminum alloy formwork has expanded and the industry concentration has continued to improve.
Infrastructure investment rebounded year-on-year, and real estate investment continued to decline year-on-year: in December, fixed asset investment was 7.0 trillion, an increase of 2.0%, of which the completed investment in infrastructure and real estate development was 1.9 trillion and 1.0 trillion respectively, with a year-on-year growth rate of 3.8% and – 13.9% respectively. Compared with November, infrastructure investment picked up in December, and real estate investment fell further. In infrastructure construction, the investment in power, transportation and public utilities was 0.42 trillion yuan, 0.59 trillion yuan and 0.88 trillion yuan respectively, with a year-on-year growth rate of 8.1%, 7.1% and – 0.3% respectively. The year-on-year growth of electric power and transportation is relatively large, and the year-on-year decline of public water conservancy investment is also significantly reduced compared with November. The central economic work conference in 2021 called for “accelerating the preliminary work and construction progress of major water conservancy projects” and the recent release of the comprehensive transportation plan for the 14th five year plan in many regions. The total investment has been significantly increased compared with the 13th five year plan. It is expected that there will be a large development space for transportation, water conservancy and other subdivisions in 2022.
Construction continued to decline, completion increased year-on-year, and the land transaction area decreased significantly year-on-year: in December, the planned land transaction area in 100 large and medium-sized cities totaled 150 million square meters, with a decrease of 55.8%, and the average transaction floor price was 3138 yuan / square meter. The construction, completion and sales areas were 160, 330 and 210 million square meters respectively, with year-on-year growth rates of – 31.2%, 1.9% and – 15.6% respectively. In December, the land transaction and supply area decreased significantly, the average transaction floor price increased, and the unit price of listed floor decreased; The new construction data decreased compared with the same period last year, and the completion data increased year-on-year. Due to the demand for payment collection of real estate enterprises at the end of the year, the completion data performed well and the new construction data was slightly weak. However, with the development of infrastructure investment and the signs of marginal policy easing in the real estate industry, we believe that the new construction data may improve.
Key recommendation
Key recommendation: infrastructure sector, Shenzhen Capol International&Associatesco.Ltd(002949)
Main risks of rating
Risk tip: manufacturing investment slowed down, the promotion of prefabricated buildings was less than expected, and macro liquidity tightened.
