Investment summary:
Talk every Monday: review the cycle of building materials
The real estate completion end has large expectation and poor expectation: we have optimistic expectation for the completion demand in 2022. Due to the high prosperity of early sales, the completion demand objectively exists, but the actual prosperity of completion depends on the availability of funds by real estate enterprises. From a short time dimension, the real estate capital chain has not recovered significantly, resulting in the short-term weakness of the completion end. However, we believe that the demand for large-scale completion objectively exists. Real estate enterprises are expected to gradually repair the capital chain in a widening policy environment, and the completion end will benefit first. Superimposing the efforts of local governments to "ensure the delivery of buildings" and introducing local state-owned enterprises to take over the construction and delivery of problematic projects, we believe that the completion of the whole 2022 will still maintain a high intensity, and the building materials in the post real estate cycle have not entered the performance downward period. At the same time, the completion and repair or give the glass more flexibility in stages.
Real estate sales are the anchor of Industry Valuation: the overall recovery process of real estate sales is still relatively slow, and the valuation of game consumption building materials may need to wait for new policy signals. We combed the sales data of several major real estate enterprises. In January 2022, the real estate sales area of most enterprises fell by more than 40% year-on-year, and poly was the only one with a year-on-year decline of only 12%. Although the policy side has frequent positive signals, it has maintained full restraint, and there are many problematic real estate projects in the early stage, which makes residents have a strong wait-and-see mood for house purchase, and a new catalyst is needed for the recovery of sales. Last week, several media reported that the proportion of down payment in Heze, Chongqing and other places was reduced to 20%, but it was not a substantive signal. In the current situation that the operation of real estate enterprises has not been substantially improved, the policy correction will continue, and the emergence of truly positive catalytic signals only needs some patience. The sluggish sales data will lead to pressure on the valuation of consumer building materials enterprises, and the completion and repair may bring performance flexibility in stages, but real estate sales are still the decisive factor in the large-scale market.
From the operation of central enterprises, the capital construction started well: the newly signed contract amount of central construction enterprises in January increased significantly year-on-year. The capital construction started well with great certainty. The newly signed contract amount is expected to continue to increase significantly in the first quarter. The newly signed contracts of Sinochem, China Railway and China railway construction increased by more than 80% in January, China State Construction Engineering Corporation Limited(601668) and MCC increased by 13% and 6% respectively. Judging from the newly signed contract amount of China State Construction Engineering Corporation Limited(601668) , the construction business maintained a high boom, while the real estate business was relatively depressed. Real estate sales reached 16.4 billion yuan, down 40.3% year-on-year.
Tracking of key sub industries:
Glass: as of February 18, the average price of the latest glass in China was 2454.08 yuan / ton, up 10.6% month on month compared with the previous week, and the spot price followed the rise, but it is expected to be marginal downward. After the early replenishment market, rigid demand gradually occupies an important part of demand. Most regions had high enthusiasm for picking up goods at the beginning of the week, and then the margin slowed down. Under the influence of the rapid rise of prices, the wait-and-see mood became stronger. The total inventory of production enterprises in key monitoring provinces is 38.1 million weight boxes, a decrease of 5.32 million weight boxes compared with that before the festival, and the inventory of manufacturers is at a low level in recent years. The market demand changes from stock demand to just demand, and it is necessary to pay close attention to the catalysis of processing plant orders on the spot market. Continuing to rise requires the logical catalysis of two main lines: the real demand of the downstream exceeds the expectation or the contraction of the supply side. It can not be verified in the short term, and the shock may dominate the market. We are highly optimistic about the long business cycle of the glass industry. The annual net profit of the glass leader is expected to remain high, and there is no risk of downward cycle. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) glass, which has entered a new growth period and continues to improve its market share.
Cement: as of February 18, 2022, the national average price of cement was 472.67 yuan / ton, down 0.09% month on week and up 5.54% year on year. After the Spring Festival, the price is basically flat, the market demand is recovering slowly, and the supply side production has not recovered yet. Provinces and regions across the country have successively announced plans to stop kilns during peak shifts in the first quarter, and the number of days to stop kilns generally exceeded that in the same period last year. The inventory of enterprises decreased slightly compared with that of last week, and the average national clinker storage capacity ratio was 54.97%, an increase of 1.98% compared with that before the Spring Festival. The operating load of the mill was 13.94%, with a month on month increase of 6.92%. The average price difference between cement and coal in this period was 341.38 yuan / ton, down 0.35% from last week. Compared with the same period last year, the average price difference between cement and coal increased by 1.03%.
Consumer building materials: the sentiment of the sector will continue to be suppressed before the real estate sales start data pick up. From a micro perspective, the real estate sales were quite sluggish in January. We expect the policy side will still maintain its support for the real estate recovery, and the introduction of the new policy is expected. After the industry impairment crisis, the emphasis on business quality will slightly loosen the accelerator of growth. In addition, the risk of overseas interest rate increase may put pressure on the growth style for a period of time. We suggest to select the leading waterproof and pipe leaders in non real estate business. Continue to recommend Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Dehua Tb New Decoration Material Co.Ltd(002043) and China Liansu.
Market review: as of the closing on February 18, the building materials sector fell 0.21% this week, and the CSI 300 index rose 1.08%. From the perspective of sector ranking, the building materials sector ranked 21st among Shenwan 31 sectors last week, with an increase of - 1.36% year to date, ranking 11th among Shenwan 31 sectors.
The top five stocks rose: China Railway Prefabricated Construction Co.Ltd(300374) , St Yabo, Beijing Hanjian Heshan Pipeline Co.Ltd(603616) , Chongqing Sifang New Material Co.Ltd(605122) , Ningbo Fuda Company Limited(600724) .
The top five stocks fell: Skshu Paint Co.Ltd(603737) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Zhuzhou Kibing Group Co.Ltd(601636) , Fujian Superpipe Co.Ltd(300198) . Investment strategy: focus on recommending Zhejiang Weixing New Building Materials Co.Ltd(002372) with dominant consumption attribute in building materials, Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) with constant strength of the strong, Zhuzhou Kibing Group Co.Ltd(601636) with high prosperity of traditional business and entering a new growth period, and Xinyi Glass, an industrial leader with continuously increasing market share; It is suggested to pay attention to China Liansu, the leader of engineering plastic pipe benefiting from infrastructure investment, and Anhui Honglu Steel Construction(Group) Co.Ltd(002541) the leader of steel structure. At the same time, it is recommended to recommend the cement sector with underestimated value and high dividend under the expectation of steady growth.
Risk tip: the demand of real estate chain declines, infrastructure investment slows down, and the price of raw materials fluctuates.
