This week's special topic: 22q1 what do you think of government investment?
In November, the issuance of special bonds was significantly accelerated, and 22q1 government investment funds were abundant
From January to November, the issuance of special bonds completed 95.4% of the annual issuance quota. Due to the time difference of 2-3 months from the issuance of special bonds to the formation of actual investment, the post placed financial funds this year are expected to form a bottom for 22q1 economy. In addition, at the regular policy briefing of the State Council on December 16, the Ministry of Finance said that it had issued a new special debt limit of 1.46 trillion yuan in 2022 to all localities in advance, indicating that the fiscal policy in 2022 has been advanced. Considering that it has been issued, it is also expected to form a physical workload near Q1 next year.
Transportation infrastructure, affordable housing projects or the focus of 22q1 government investment, and the support for major projects such as water conservancy and urban pipe network is expected to be significantly improved
Compared with before, at the regular policy briefing of the State Council on December 16, the direction of national major strategic projects was added in the field of special debt investment. At the same time, it is required to focus on the nine key support directions and increase support for major projects such as water conservancy and urban pipe network construction. The 14th five year plan clearly requires to "expand the supply of affordable rental housing", Since then, the central economic work conference and the Political Bureau meeting frequently mentioned that the central economic work conference in 2022 at the end of the year once again named "promoting the construction of affordable housing". We judge that affordable housing projects may become an important starting point for steady growth in 2022.
Considering that the infrastructure in 22q1 is expected to underpin the economy, and the construction is in a critical period after the Spring Festival, and the two sessions are held in March in normal years, the market is easy to form a good commencement expectation in 22q1, which is conducive to the blue chip valuation and repair of undervalued buildings.
Market Review
Last week, the construction (CITIC) index fell by 0.92%, the CSI 300 index fell by 0.14%, and all the three sub sectors fell. Among the individual stocks, Shanghai Yanhua Smartech Group Co.Ltd(002178) (+ 61.36%), Shanghai Luoman Lighting Technologies Inc(605289) (+ 34.76%), Shenzhen Wenke Landscape Co.Ltd(002775) (+ 21.00%), huilv Ecology (+ 15.71%), Shanghai Fengyuzhu Culture Technology Co.Ltd(603466) (+ 14.69%) led the gains. The current market hot spots are mainly concentrated in "construction + new energy" and "carbon neutralization" In the industrial chain, the valuation of the infrastructure sector has been significantly repaired recently, and China Communications Construction Company Limited(601800) has recorded a positive return of 18.75% since December. We believe that it is related to the increased downward pressure on the economy and the expected warming of the infrastructure steady growth policy. It is suggested to actively pay attention to the guidance of the follow-up central meeting on counter cyclical regulation.
Investment advice
Under the medium and long-term growth dimension of "construction +" leader, enterprises with "new energy" and "chemical" industries have gradually entered the performance cashing period, and their performance is expected to grow high. Under the dimension of value variety valuation restoration, local state-owned enterprise leaders are expected to enjoy the high prosperity of regional infrastructure. The profit elasticity brought by the improvement of operating efficiency has initially appeared. There are opportunities for both steady growth and report quality improvement in the medium and long term. The increase of market share of central enterprises supports the continuous growth of revenue. After the completion of leverage reduction, roe still has obvious upward elasticity, With the continuous strengthening of the profit release ability and willingness of central enterprises, they also have strong elasticity of valuation repair.
Risk tips: Infrastructure & real estate investment went down more than expected, new energy & chemical business expansion was less than expected, the concentration of assembled leaders was less than expected, and the progress of efficiency improvement in the reform of central enterprises and state-owned enterprises was less than expected.
