[core view of this week] the central economic work conference shows that the current policy focus has shifted to “steady growth”, and it is expected that subsequent departments may introduce steady growth measures to cope with the downward pressure on the economy in the first half of next year. In terms of infrastructure construction, it is proposed to carry out infrastructure investment moderately in advance. It is expected that the issuance and use of special bonds will be accelerated, and power and energy investment is expected to become an important starting point. At present, the overall valuation of central enterprises of infrastructure construction is at the lowest range in history, and the expected improvement of infrastructure construction is expected to promote the revision of valuation, Highlight Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (green power construction and operation and pumped storage leader, 22pe11x), China Energy Engineering Corporation Limited(601868) (large energy base and UHV construction leader, 22pe11x), China Communications Construction Company Limited(601800) (offshore wind power and REITs have great business potential, 22pe5x), China Railway Group Limited(601390) (22pe4.4x), China Railway Construction Corporation Limited(601186) (22pe3.6x). In terms of real estate, the meeting still emphasized that real estate should not be sold, but also mentioned that policies should be implemented according to the city, and focused on promoting the construction of indemnificatory housing. We expect that the real estate policy has shifted from marginal to loose, and indemnificatory housing is expected to become one of the important starting points for steady growth next year. We recommend China State Construction Engineering Corporation Limited(601668) (it is expected that the order of 21q1-3 indemnificatory housing will reach 80 billion yuan, 22pe3.8x) and Shanghai Construction Group Co.Ltd(600170) (the leader of affordable housing construction in Shanghai, 22pe7x), China State Construction Engineering Corporation Limited(601668) International (87% of the mainland orders in the first half of the year were implemented in the mode of resettlement housing government directional repurchase, 22pe5.5x), as well as the leader of steel structure processing in the field of prefabricated buildings Anhui Honglu Steel Construction(Group) Co.Ltd(002541) (has assisted in the implementation of several steel structure affordable housing projects, 22pe19x), and the leader of prefabricated design Shenzhen Capol International&Associatesco.Ltd(002949) (it is estimated that the design income related to affordable housing in 20 years will be 200-400 million yuan, 22pe11x). In terms of double carbon, the meeting pointed out that the new renewable energy and raw material energy will not be included in the total energy consumption control, and the formation of an incentive and restraint mechanism to reduce pollution and carbon will be accelerated. It is expected that the investment in power grid transformation and upgrading, distribution network construction and intelligent construction of power system will be significantly accelerated, and the construction of new power system is recommended Target Suwen Electric Energy Technology Co.Ltd(300982) (private distribution network EPCO leader, 22pe25x), Acrel Co.Ltd(300286) (enterprise micro network construction and energy efficiency management expert, 22pe28x), and garden steady growth leader Dongzhu Ecological Environment Protection Co.Ltd(603359) (22pe12x) actively distributing forestry carbon sink.
Central economic work conference: the focus shifted to “steady growth”, and the policy force was appropriately advanced. This week’s central economic work conference pointed out for the first time that China’s economy is currently facing “triple pressures of shrinking demand, supply shock and weakening expectations”, re mentioned “adhering to economic construction as the center”, and added emphasis on “all regions and departments should shoulder the responsibility of stabilizing the macro economy, all parties should actively launch policies conducive to economic stability, and the policy force should be appropriately advanced”, It shows that the focus of the current policy has shifted to “steady growth”. It is expected that subsequent departments may issue corresponding steady growth policies, and will put the implementation of the policies ahead to deal with the downward pressure on the economy in the first half of next year, create a “stable and healthy economic environment” and welcome the smooth convening of the 20th National Congress. Our specific analysis is as follows:
The meeting called for “moderately advanced infrastructure investment”, and the infrastructure is expected to improve marginally. The meeting pointed out: “we should continue to implement active fiscal policy and prudent monetary policy, organically combine cross cyclical and counter cyclical macro-control policies, coordinate and link fiscal policy and monetary policy, improve the efficiency of active fiscal policy, ensure the intensity of fiscal expenditure, accelerate the progress of expenditure, and moderately advance infrastructure investment”. In contrast, we expect that the financial expenditure is expected to accelerate significantly at the beginning of next year, the issuance and use of special bonds are expected to accelerate, and the infrastructure is expected to improve marginally. However, at the same time, the meeting still stressed “strict financial discipline and resolutely curb the new implicit debt of local governments”. Therefore, the scope of infrastructure improvement remains to be observed. At present, the profit growth of infrastructure construction central enterprises is relatively stable and the overall valuation is at the lowest range in history. The subsequent steady growth policies of various departments are expected to catalyze the plate. It is recommended that Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , China Energy Engineering Corporation Limited(601868) , China Communications Construction Company Limited(601800) , China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) .
The meeting showed that the real estate policy remains determined, and affordable housing is expected to become one of the important starting points for steady growth. For the real estate industry, although the meeting pointed out that “we should adhere to the positioning that houses are used for living, not for speculation”, which shows the policy determination, However, we also mentioned “implementing policies for the city” (not mentioned in the two sessions and the previous three Politburo meetings this year), and we expect that the real estate policy has shifted to loose. The meeting also pointed out that “we should adhere to the simultaneous development of rent and purchase, accelerate the development of long-term rental housing market and promote the construction of indemnificatory housing”. In contrast, the relevant expression of last year’s economic work conference is “Attach great importance to the construction of indemnificatory rental housing and accelerate the improvement of the long-term rental housing policy.” From “attaching great importance” to “promoting”, it may indicate that the construction of affordable housing has entered the implementation stage from the preparation stage, and the construction progress may be significantly accelerated next year. We believe that accelerating the construction of affordable housing can not only improve people’s livelihood, but also hedge the contraction of private real estate investment and stabilize real estate investment, which is expected to become one of the important starting points for steady growth next year. According to our calculations, Affordable rental housing is expected to contribute 195 billion yuan of construction and installation investment next year (see the report issued this week for detailed calculation), which will form a certain support for housing construction investment. Prefabricated buildings are widely used in affordable housing, and the leading industry chain is expected to accelerate its growth. The steel structure processing leading Anhui Honglu Steel Construction(Group) Co.Ltd(002541) (has assisted in the implementation of several steel structure affordable housing projects), the leader of prefabricated design Shenzhen Capol International&Associatesco.Ltd(002949) (it is estimated that the relevant design revenue of affordable housing in 20 years will be 200-400 million yuan), and pay attention to the leader of prefabricated decoration Zhejiang Yasha Decoration Co.Ltd(002375) and the leader of integrated sanitary ware Guangzhou Seagull Kitchen And Bath Products Co.Ltd(002084) . The central and state-owned construction enterprises have obvious competitive advantages in the affordable housing construction market, and are expected to benefit from the rapid growth of affordable housing construction orders, which are mainly recommended China State Construction Engineering Corporation Limited(601668) (it is estimated that the order of 21q1-3 affordable housing will reach 80 billion yuan, 22pe3.8x), Shanghai Construction Group Co.Ltd(600170) (the leader of affordable housing construction in Shanghai), China State Construction Engineering Corporation Limited(601668) International (it is announced that 87% of the mainland orders in the first half of this year will be implemented in the mode of resettlement housing government targeted repurchase).
The meeting pointed out that we should correctly understand and grasp the “double carbon”, scientifically assess and establish an effective restraint and incentive mechanism, and focus on the construction of new power system and the direction of carbon sink. The meeting pointed out that the “double carbon” should be unswervingly promoted, but it is impossible to accomplish its work in one battle. The gradual withdrawal of traditional energy should be based on the safe and reliable substitution of new energy. It is expected that the follow-up “double carbon” promotion will be more stable and avoid the “carbon charge”. The meeting pointed out that “scientific assessment should be carried out, and the new renewable energy and raw material energy consumption should not be included in the total energy consumption control”. Under the background of energy consumption assessment of local governments, this change will significantly enhance the driving force of all parties’ investment in clean energy, and green power investment is expected to accelerate significantly, Focus on and recommend the core targets of new power system construction: Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) (green power construction and operation and pumped storage leader), China Energy Engineering Corporation Limited(601868) (energy base and UHV construction leader), Suwen Electric Energy Technology Co.Ltd(300982) (private distribution network EPCO leader), Acrel Co.Ltd(300286) (enterprise microgrid construction and energy efficiency management experts). In addition, the meeting also pointed out that “Create conditions to realize the transformation from” double control “of energy consumption to” double control “of total carbon emission and intensity as soon as possible, accelerate the formation of incentive and restraint mechanism for reducing pollution and carbon, and prevent simple layer by layer decomposition”, indicating that the starting point of the policy is to pursue more use of market-oriented means to achieve the goal of carbon reduction and avoid too much administrative intervention Carbon sequestration is an important means to form a market-oriented incentive and restraint mechanism. It is expected to further accelerate the construction and development, with emphasis on Dongzhu Ecological Environment Protection Co.Ltd(603359) (actively layout forestry carbon sequestration).
Investment suggestion: the central economic work conference shows that the current policy focus has shifted to “steady growth”. In terms of infrastructure construction, it is proposed to carry out infrastructure investment moderately in advance. It is expected that the issuance and use of special bonds will be accelerated, and power energy investment is expected to become an important starting point. At present, the overall valuation of central enterprises of infrastructure construction is at the lowest range in history, and the expected improvement of infrastructure construction is expected to promote the valuation repair. It is mainly recommended that Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , China Energy Engineering Corporation Limited(601868) , China Communications Construction Company Limited(601800) , China Railway Group Limited(601390) , China Railway Construction Corporation Limited(601186) . In terms of real estate, it is emphasized to promote the construction of affordable housing. Affordable housing is expected to become one of the important starting points for steady growth next year. It is mainly recommended to China State Construction Engineering Corporation Limited(601668) , Shanghai Construction Group Co.Ltd(600170) , China State Construction Engineering Corporation Limited(601668) international, as well as the steel structure processing leader Anhui Honglu Steel Construction(Group) Co.Ltd(002541) and the prefabricated design leader Shenzhen Capol International&Associatesco.Ltd(002949) in the field of prefabricated buildings. In terms of double carbon, the meeting pointed out that the new renewable energy and raw material energy consumption will not be included in the total energy consumption control, and the formation of an incentive and restraint mechanism for reducing pollution and carbon will be accelerated. It is expected that the investment in power grid transformation and upgrading, distribution network construction and intelligent construction of power system will be significantly accelerated, with emphasis on the construction targets of new power system Suwen Electric Energy Technology Co.Ltd(300982) and Acrel Co.Ltd(300286) , And the garden steady growth leader Dongzhu Ecological Environment Protection Co.Ltd(603359) .
Risk tips: policy promotion is less than expected, epidemic impact is more than expected, accounts receivable risk, overseas operation risk, etc.
