Core view:
The peak season of the industry is coming. In February, the cement price began to rise, and the clinker price has also completed several rounds of rise. The rise is mainly caused by the low clinker inventory superimposed by the high fuel cost during the staggered peak shutdown. At present, although the cement is in the off-season stage, the cement price is still at a historically high level. In terms of demand, with the gradual start-up and recovery of the post holiday market, the operating rate of downstream construction sites shows a steady upward trend, especially the market recovery in the south is better than that in the north. It is expected that with the start-up of construction in spring in March, the peak cement season will come soon. In terms of supply, the staggered peak and kiln shutdown in March will be completed one after another, and the supply of clinker and cement will rise steadily. It is suggested to pay attention to the leading enterprises in the cement area. In February, the spot price of float glass continued to rise, mainly due to the further replenishment of middle and downstream enterprises before the commencement of construction in spring, which boosted the market price of float glass to a certain extent. With the start of construction in spring, it is expected that the glass market demand will increase steadily and the price of float glass will further increase.
Industry profits grew steadily. In 2021, industrial enterprises above Designated Size achieved a total profit of 870921 billion yuan, an increase of 34.3% over the previous year, 39.8% over 2019 and an average increase of 18.2% over the two years. The non-metallic mineral products industry achieved a revenue of 662177 billion yuan, a year-on-year increase of 13.8%; The total profit was 558.74 billion yuan, a year-on-year increase of 14.3%.
Cement production will decline in 2021. In 2021, the cumulative output of cement in China was 2.363 billion tons, a year-on-year decrease of 1.2%. In 2021, the investment in infrastructure construction increased by 0.4% year-on-year, the investment in real estate development increased by 4.4% year-on-year, and the new construction area of houses decreased by 11.4% year-on-year. Infrastructure investment is expected to rise in 2022, which is good for cement market demand.
Glass production increased in 2021. In 2021, the annual output of flat glass reached 1.017 billion weight boxes, with a year-on-year increase of 8.4%. In 2021, the completed housing area increased by 11.2% year-on-year, providing strong support for the demand of the glass industry. With the arrival of spring after the year, the completion end will pick up, the glass market demand is expected to increase, and the glass price will resume the upward trend.
Investment advice. In 2022, the building materials industry mainly focuses on the following investment directions: (1) leading consumer building materials that benefit from the improvement of industry concentration: Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) ( Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) . SZ), Zhejiang Weixing New Building Materials Co.Ltd(002372) ( Zhejiang Weixing New Building Materials Co.Ltd(002372) . SZ), ad shares ( Yonggao Co.Ltd(002641) . SZ). (2) Glass fiber faucet benefiting from the increase of wind power demand: China Jushi Co.Ltd(600176) ( China Jushi Co.Ltd(600176) . SH). (3) Glass leader with multi business layout Zhuzhou Kibing Group Co.Ltd(601636) ( Zhuzhou Kibing Group Co.Ltd(601636) . SH), CSG a ( Csg Holding Co.Ltd(000012) . SZ). (4) Regional leaders of cement industry Huaxin Cement Co.Ltd(600801) ( Huaxin Cement Co.Ltd(600801) . SH) and Gansu Shangfeng Cement Co.Ltd(000672) ( Gansu Shangfeng Cement Co.Ltd(000672) . SZ) benefiting from the recovery of infrastructure investment.
Risk warning: the risk that the new capacity of the industry exceeds the expectation; Risks of raw material price increase exceeding expectations, etc.
