Investment summary:
Talk every Monday: the demand for consumer building materials is deterministic
The economic work conference boosted the expectation of the building materials sector: the central economic work conference held from December 8 to 11 called for the active introduction of policies to stabilize the economy and appropriate forward development, and required the government to accelerate the progress of expenditure and carry out infrastructure investment in advance. We believe that this meeting will show the determination of the central government to stabilize the economy, the financial development will be ahead of schedule, and the infrastructure investment may exceed the expectation at the beginning of next year. This meeting once again stressed that real estate is not fried, and expressed its support for the virtuous cycle and healthy development of the real estate industry. At the same time, it explored other forms of housing, and showed the determination of senior management to continuously improve people's living environment. The pessimism of real estate is expected to be further repaired, the demand for downstream building materials will be supported, and the valuation and repair market of building materials sector may continue to be deduced.
The market space of consumer building materials will continue to grow: the improvement of living environment will still be an important theme of social development. The secondary decoration of new houses and stock houses will bring certainty to the market space of consumer building materials. We estimate that the annualized growth rate of secondary decoration demand from 2021 to 2025 will reach more than 10%. In addition, new houses will continue in the future, and the scale of retail decoration market is expected to continue to expand. Taking plastic pipes as an example, we estimate that the market scale of home decoration retail plastic pipes will increase from 44.9 billion yuan in 2021 to 51.3 billion yuan in 2025. In the future, the growth rate of retail building materials market will exceed that of engineering building materials market. We believe that building materials enterprises widely recognized by consumers with outstanding brand strength will enjoy the certainty of medium and long-term performance.
Key sub industry tracking:
Glass: as of December 10, the national average price of glass was 2215.85 yuan / ton, up 3.33% month on month compared with the previous week, and the price continued to rise steadily. Prices in East and South China are higher than those in North China. The total inventory of production enterprises in key monitoring provinces was 33.12 million weight boxes, a decrease of 9.48% over last week. On the demand side, driven by the acceleration of work, the supply side is expected to accelerate the contraction in the next quarter or two, and the glass price will still have strong support in the medium and long term. At present, the mood is low near the off-season, but it is still the time point of high-quality layout. In the follow-up, we should pay close attention to the stimulation of supply side contraction on the plate. We will continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) integrated leading Lutheran glass, which has entered a new growth period and has continuously increased its market share.
Cement: according to Zhuo Chuang information, as of December 10, 2021, the national average price of cement was 522.42 yuan / ton, down 1.74% from last week and up 7.06% from last year. Near the cold winter, the cement terminal demand will be marginal downward, there is no strong support on the demand side, and the short-term price may continue to fall. However, the central economic work conference boosted the expectation of infrastructure investment. At the beginning of next year, the finance pointed out that it is expected to exceed the expectation, the infrastructure investment is ahead of schedule, and the cement sector is expected to improve in stages.
Consumer building materials: the central economic work conference has shown the requirements for promoting the virtuous circle and healthy development of the real estate industry. The industrial chain is expected to be further repaired, and the valuation repair market of consumer building materials may continue to deduce. We observed that the prices of raw materials such as PP and PVC continued to decline, and the profitability of pipe enterprises continued to improve. Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Zhejiang Weixing New Building Materials Co.Ltd(002372) are recommended.
Market review: as of the closing on December 10, the building materials sector rose 3.74% and the CSI 300 index rose 3.14%. From the sector ranking, the building materials sector ranked fifth among the 28 sectors of Shenwan last week, with an increase of - 0.2% year to date, ranking 20th among the 28 sectors of Shenwan.
The top five stocks rose: Luoyang Glass Company Limited(600876) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Flat Glass Group Co.Ltd(601865) , D&O Home Collection Co.Ltd(002798) , Guangdong Dongpeng Holdings Co.Ltd(003012) .
The top five stocks fell: Jinyuan Ep Co.Ltd(000546) , Luyang Energy-Saving Materials Co.Ltd(002088) , Guangdong Golden Glass Technologies Limited(300093) , Beijing Lier High-Temperature Materials Co.Ltd(002392) , Huaxin Cement Co.Ltd(600801) . Investment strategy: focus on Zhuzhou Kibing Group Co.Ltd(601636) with high prosperity of traditional business and entering a new growth period, Xinyi Glass, an industrial leader with continuously increasing market share, and Zhejiang Weixing New Building Materials Co.Ltd(002372) , Skshu Paint Co.Ltd(603737) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) with dominant consumption attributes in building materials. It is recommended to pay attention to the cement market driven by the expected rise in infrastructure construction.
Risk tip: the real estate capital chain continues to deteriorate, infrastructure investment slows down, and raw material prices fluctuate.
