"Looking forward to 2022, there are opportunities for both traditional and emerging chains in the building materials sector. In the traditional chain, consumer building materials are still the preferred track, and the fundamentals are expected to bottom up next year. Under the condition that the downstream demand of glass enterprises is relatively stable, new businesses such as photovoltaic, electronics and medicine are expected to bring new increment, while the cement sector needs to pay attention to the impact of carbon neutralization on the supply of the industry Changes in. In the emerging chain, electronic glass has the logic of domestic substitution and is expected to show high growth. Photovoltaic glass is expected to benefit from the improved demand of the photovoltaic industry. In addition, we can also pay attention to the investment opportunities brought by the rising demand for energy conservation for thermal insulation materials. " On December 23, Wang Tao, chief of Tianfeng Securities Co.Ltd(601162) building materials Co., Ltd., said in an interview with securities times · e company.
the biggest change in 2021 is the change in the prosperity of the downstream real estate
It is understood that since the beginning of this year, the building materials (CITIC) index has basically not risen or fallen, and the revenue ranks 20th in all first-class industries. Compared with 2020, the revenue and ranking have decreased. In terms of sub sectors, glass, glass fiber and other cyclical products rose by more than 20% this year, but after the price peaked, the index fell to a certain extent, and the growth of refractories and other downstream materials for manufacturing industry was also better. The cement sector has fallen by 10% so far this year, which is larger than that of last year, and the yield of consumer building materials has also dropped significantly compared with last year.
"From the perspective of cycle and growth, the growth of the cycle plate dominated by glass and glass fiber this year is significantly better. The main reason is that the upward product price in the first three quarters has brought high elasticity to the profits of enterprises." Wang Tao said, however, it can be seen that after August, the glass plate is facing the dual pressure of falling prices and high costs, and the share price has also been significantly adjusted. Consumer building materials, which have shown relatively good growth in the past, have a weak performance this year. The core lies in the decline in the downstream demand of real estate, the increase of cost pressure and the risk of capital chain.
Another change is that under the circumstances of carbon neutralization and high investment in manufacturing industry, the attention of traditional industrial building materials with low attention has increased significantly, and the stock price performance is also good, such as refractory materials, industrial glass, etc.
Wang Tao believes that the biggest change in the building materials sector in 2021 is the change in the prosperity of the lower reaches of the real estate. Before 2020, the high boom of consumption of building materials was brought about by the high boom of real estate, fine decoration and centralized purchase of real estate. However, in the second half of 2021, the risk of real estate increased under the action of policy regulation and financial environment, and the boom degree decreased rapidly, which also brought great business pressure to the building materials sector upstream of real estate. Subsequently, the era of rapid growth relying on the large b-end business of real estate may have passed, but the housing demand brought by urbanization is still, which also means that the new commercial housing channels of building materials in the past are migrating to channels such as indemnificatory housing and second-hand housing stock transformation. Building materials enterprises need to adapt to new channel changes in order to continue to achieve sustainable growth. Under such circumstances, the subsequent channel advantages of consumer building materials varieties with high proportion of C and small b-end businesses are expected to be more prominent, and the concentration of consumer building materials is expected to continue to improve.
M & A in cement and float glass will become a trend
"In the first three quarters, the revenue and net profit of 54 building materials enterprises we focused on tracking grew by 17% and 13.3% year-on-year respectively, and the growth rates in the third quarter were 3.4% and - 6.5% respectively. The overall prosperity of the real estate chain in the first half of this year was still high, so the prosperity of the building materials sector was also good, but in the third quarter, the growth rate of revenue and profit of the building materials sector decreased significantly. ”According to Wang Tao, on the one hand, the prosperity of the real estate / infrastructure chain is declining rapidly, which leads to the decline of the year-on-year increase of the price of cyclical products and the reduction of the shipment speed. Consumer building materials enterprises are also actively controlling their real estate exposure; On the other hand, under the background of dual control of energy consumption, the production of energy consuming enterprises such as cement, ceramics and glass processing is affected.
Weak demand and the rise in the price of bulk raw fuels in the upstream were one of the problems faced by building materials enterprises in the third quarter, which also led to the pressure that building materials enterprises could not smoothly transfer all the downstream to the upstream price rise, which also led to negative growth in the overall performance of the sector in the third quarter. Looking forward to the fourth quarter, the pressure of price rise in the upstream has eased. For example, the coal price has fallen at a high level, the growth of some chemical raw materials consuming building materials has slowed down, and the product prices of some enterprises have increased. We expect that the pressure on the profit side of Q4 in the building materials sector has eased, but the income side may still be affected by the weak prosperity of the downstream, and the growth pressure still exists.
On December 11, the business integration conference of China building materials and cement sector was held in Beijing. The integrated China building materials cement sector will produce a cement listed company with the largest business scale and a market value of 100 billion in the world. In addition, conch raised Jilin Yatai (Group) Co.Ltd(600881) , became the fifth largest shareholder of Gansu Shangfeng Cement Co.Ltd(000672) , investigated Guangdong Tapai Group Co.Ltd(002233) , and participated in China West Construction Group Co.Ltd(002302) . Will there be a wave of M & A and investment in the building materials sector in 2022?
Wang Tao believes that the competition pattern of several large building materials varieties is expected to continue to improve, which is also one of the medium and long-term logic of subsequent building materials sector investment. At present, the capacity of cement and float glass has been strictly constrained by the capacity replacement policy. The further expansion of leading companies can only be realized through acquisition. For the ceramic tile industry with high energy consumption, this trend is also highlighting. For consumer building materials, Beijing New Building Materials Public Limited Company(000786) is also rapidly entering waterproof, coating and other industries through acquisition. At present, other consumer building materials still expand mainly through self built production capacity. The acquisition of building materials enterprises is mainly aimed at obtaining channels and capacity indicators. In the sub industries that pay more attention to these two factors, M & A will become a trend. For other sub industries, this trend still needs to be observed.
building materials are expected to benefit from the recovery of infrastructure / real estate
It is worth noting that in order to achieve the goal of carbon peak and carbon neutralization in the future, some building materials enterprises also began to try to intervene in new energy fields such as photovoltaic power generation.
For this phenomenon, Wang Tao analyzed that building materials enterprises involved in the photovoltaic industry may have the following considerations: 1) BIPV needs the close combination of photovoltaic modules and traditional building materials, and traditional building materials leaders have obvious channel and technical advantages in this field. Photovoltaic has opened up a new market space for these enterprises, such as the combination of waterproof and photovoltaic roofing; 2) Some building materials leaders have good business models and have accumulated a large amount of cash assets in the process of operation. Under the condition of limited investment in traditional industries, new investment directions are needed, such as some cement leaders cutting into the operation of photovoltaic power plants; 3) Some high energy consuming building materials sub industries need to increase the use proportion of clean energy, so they build their own photovoltaic power stations; 4) Some building materials enterprises are optimistic about the new energy track. The company's decision has changed and its main business has been transformed to new energy.
"We believe that the market space and growth of the new energy track are good, the energy consumption of building materials enterprises is also high, and there is a great demand for clean energy in the future. In the future, more and more enterprises may enter the field of photovoltaic self use, which is also the general trend of the manufacturing industry. However, for the tilt or transformation of the main industry to new energy, we need to look at the correlation between traditional business and new energy and their own capital Source endowment. " Wang Tao thinks.
The central economic work conference held a few days ago placed steady growth at the top of economic work. Under such a tone, will infrastructure and real estate investment be better than before? In this regard, Wang Tao said that looking back on the central economic work conference in the past three years and the contents of the conference in 2021, the policy support for infrastructure has increased, and the real estate policy has been fine tuned under the main tone of adhering to the principle of no speculation in real estate.
"We believe that the economy may face greater downward pressure in the first half of next year, and the demand for steady growth of infrastructure / real estate may increase. In fact, after entering the fourth quarter, the capital side policies of infrastructure and real estate have improved, and the effect of this improvement may be reflected in the first quarter to the second quarter of next year." Wang Tao said, "Overall, we expect that the upward elasticity of infrastructure construction may be better than that of real estate at the beginning of next year, and the bottom of real estate fundamentals may need to be gradually confirmed in the first quarter of 2022, but the general direction is generally good. Building materials are expected to benefit from the recovery of infrastructure / real estate, such as glass and consumer building materials related to the completion of real estate, cement and waterproof related to the new construction of infrastructure and real estate, and Building materials categories related to sub sectors such as underground pipe network. "
opportunities and risks coexist next year
Wang Tao believes that both traditional and emerging chains will have opportunities next year. The opportunities of the traditional chain mainly come from the marginal improvement on the demand side and the continuous optimization on the supply side. The consumption of building materials is still the preferred track. When the downstream demand of glass enterprises is relatively stable, new businesses such as photovoltaic, electronics and medicine are expected to bring new increment, while the cement sector needs to pay attention to the changes brought by carbon neutralization to the industry supply. In the emerging chain, electronic glass has the logic of domestic substitution and is expected to show high growth. Photovoltaic glass is expected to benefit from the improved demand of the photovoltaic industry. In addition, we can also pay attention to the investment opportunities brought by the rising demand for energy conservation for thermal insulation materials.
When it comes to investment opportunities, naturally we can't ignore investment risks. In Wang Tao's view, the risks of the building materials industry mainly come from three aspects: first, the decline in downstream infrastructure and real estate demand is higher than expected: the changes in cement and glass prices are mainly affected by real estate and infrastructure demand, and then related to macroeconomic environment, capital availability and other factors. The current changes in cement and glass prices reflect a good boom, but if the subsequent changes are due to weather Due to the epidemic situation, policies and other reasons, the sustainability of infrastructure and real estate resumption is less than expected, which may lead to the rise of cement and glass prices less than expected.
Secondly, the price rise of raw materials exceeded expectations: at the beginning of 2021, the price of bulk commodities rose across the board, while the cost of chemical raw materials and coal accounted for a relatively high proportion in some building materials sub industries, which squeezed the profit space of building materials companies. If the price of raw materials and coal continued to rise in the later stage, or the gross profit margin of the company continued to decline, resulting in profit pressure.
Finally, the production capacity is put in higher than expected: the supply shortage in 2020 makes some molecular industries such as glass fiber and photovoltaic glass speed up the pace of production capacity layout. If more production capacity is put in the future, it may lead to excess supply in the industry and a sharp decline in prices.
(Securities Times · e company)
