Key investment points
This week (2022.2.21 – 2022.2.25, the same below): this week, the building materials sector (SW) rose or fell by - 5.59%. In the same period, the Shanghai and Shenzhen 300 and wandequan a indexes rose or fell by - 1.31% and - 0.76% respectively, and the excess return was - 4.28% and - 4.83% respectively.
Fundamentals and high-frequency data of bulk building materials: (1) cement: the market price of high-standard cement in China this week was 515 yuan / ton, which was + 1 yuan / ton compared with last week and + 81 yuan / ton compared with the same period in 2021. Regions with higher prices than last week: Yangtze River Basin (+ 6 yuan / ton), Central South (+ 5 yuan / ton) and (southwest (+ 12 yuan / ton); Regions where prices fell: Pan Beijing Tianjin Hebei region (- 10 yuan / ton) and North China (- 12 yuan / ton). The average cement storage location of the national sample enterprises this week was 64.3%, which was -0.9pct compared with last week and + 4.3pct compared with the same period in 2021. The average cement delivery rate (daily delivery rate / production capacity) of the national sample enterprises was 20.5%, which was + 9.8pct compared with last week and + 7.6pct compared with the same period in 2021. (2) Glass: according to the statistics of Zhuo Chuang information, the average price of the national float white glass original sheet is 2454 yuan / ton, which is + 55 yuan / ton compared with last week and + 309 yuan / ton compared with the same period in 2021. According to the statistics of Zhuo Chuang information, the original film inventory of sample enterprises in 13 provinces in China was 41.24 million heavy boxes, up from + 3.14 million heavy boxes last week and - 4.06 million heavy boxes in the same period in 2021. (3) Glass fiber: the median turnover of alkali free 2400tex direct yarn was 6150 yuan / ton, the same as last week, and + 375 yuan / ton compared with the same period in 2021.
Zhou's view: we believe that the road of credit easing will not be achieved overnight. This week's geopolitical emergencies have caused a short-term shock of global macro variables and a seesaw performance between China's growth cycle, but real estate relaxation is still being implemented according to local conditions. After the financial data in January confirmed the inflection point of wide currency, the credit expansion of physical demand and real estate chain formed by infrastructure projects may come in 1 ~ 2 quarters, and leading enterprises often take the lead in entering the expansion cycle. Looking back, we believe that in addition to the shock and rise of the municipal infrastructure industry chain, those leading companies in the post real estate industry chain with growth are also the elastic protagonists of wide credit, and the inflection point of shipment or order growth can be used as a signal on the right. Attention to the varieties of building materials, such as 35.
In terms of bulk building materials: under the force of fiscal policy, the growth rate of infrastructure rebounded, and the policies of guaranteed housing and guaranteed delivery housing stabilized the expectation of real estate investment. Based on the extension of peak staggering and the strengthening of industry self-discipline, we calculate that after eliminating peak staggering, the supply capacity of the industry will be reduced slightly year-on-year in 2022. With the support of stable investment on demand, the cement boom can still remain high. The dividend yield of 5 ~ 9% in 2021 makes the current valuation of 7 times P / E ratio have room for repair. In the short term, with the good implementation of staggered peak kiln shutdown in winter and the gradual start of downstream demand, coupled with the continuous price rise of clinker along the river, cement is expected to start a comprehensive rise cycle, and the price elasticity is still expected in peak season under high capacity utilization. It is suggested to pay attention to Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) and Gansu Shangfeng Cement Co.Ltd(000672) which have strong performance certainty and bright spots in the extension of medium and long-term industrial chain, and Tangshan Jidong Cement Co.Ltd(000401) , Xinjiang Tianshan Cement Co.Ltd(000877) which benefit from the integration of northern market and great business elasticity in the medium and long term.
Decoration and building materials: steady growth is expected to boost demand, and the sector valuation is expected to continue to repair under the relaxation of real estate chain policies and funds. We expect that the construction of underground pipe network and sponge city will bring sustainable increment during the 14th Five Year Plan period. The completion end of the real estate remained resilient, but the new construction and sales remained weak. The real estate sector has gradually released easing signals. Previously, according to the financial Associated Press, the opinions on the supervision of national commercial housing pre-sale funds have been issued recently, and the supervision of pre-sale funds is expected to be improved. At the same time, the proportion of down payment on the credit side has been reduced in many places recently. We expect that the follow-up real estate enterprises and consumer financing side are expected to continue to relax. Previously, the valuation of the decoration and building materials sector has been in the lower position of the historical center due to the slowdown in demand, the rise of raw materials and cash flow pressure. With the relaxation of expectations on the edge of real estate, the decline of high raw material costs, and the gradual release of bad debt provision and cash flow risk expectations, the overall sector is expected to usher in performance and valuation repair. Referring to the historical experience of the consumer building materials sector and the current competitive situation, in the stage of capital easing + confidence gradually recovering from the bottom of the real estate industry, some companies may take the lead to further increase their share and enter a new expansion cycle with the help of channel leading layout, operating efficiency advantage or financing plus leverage. The inflection point of shipment or order growth can be used as the right signal to pay attention to Guangdong Kinlong Hardware Products Co.Ltd(002791) Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , China Liansu, A.D., Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) , Keshun Waterproof Technologies Co.Ltd(300737) , Jiangsu Canlon Building Materials Co.Ltd(300715) , Monalisa Group Co.Ltd(002918) , Zhejiang Walrus New Material Co.Ltd(003011) , etc.
Risk warning: the epidemic situation exceeded expectations, the real estate credit risk was out of control, and the policy concentration exceeded expectations.
