Key investment points:
On March 5, the “two sessions” were held in Beijing. In the government work report, the expected growth target of China’s GDP this year was 5.5%, mainly considering stabilizing employment, ensuring people’s livelihood and preventing risks. The macro policy documents were effective, and the proactive fiscal policy and prudent monetary policy were implemented. The deficit ratio is planned to be arranged at 2.8%, and the special debt of local governments is 3.65 trillion yuan. It is required to start the construction of a number of major projects, new infrastructure and the transformation of old public facilities, so as to ensure the goal of “steady growth”. We give the industry a “recommended” rating.
In January 2022, the growth rate of credit cooperatives across the country ushered in an inflection point and achieved growth. In January, the PMI of newly signed orders in the construction industry recorded 53.3, maintaining the momentum of prosperity for four consecutive months, indicating that the requirements of cross cycle adjustment of macro policies and early fiscal force have been gradually implemented. In January, 484.4 billion yuan of special bonds of local governments were added, specifically invested in the infrastructure of municipal and industrial parks of 165355 billion yuan, transportation infrastructure of 105518 billion yuan, agriculture, forestry and water conservancy of 44.061 billion yuan, energy and urban and rural cold chain logistics infrastructure of 11.533 billion yuan, totaling 326467 billion yuan, accounting for 34%, 22%, 9% and 2% respectively. The investment in the whole infrastructure sector accounted for 67% of the new special bonds. This is consistent with the key investment direction of the advance approval of 1.46 trillion yuan of special bonds by the Ministry of finance. It is expected that the physical workload will be formed from March to April, forming a practical support for steady growth. Focus on China Energy Engineering Corporation Limited(601868) , China Communications Construction Company Limited(601800) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) .
In the real estate sector, the “real estate bubble” has been reversed, and the central authorities have pushed the adjustment of real estate prices smoothly. On March 2, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, attended the press conference of the State Council Information Office and made it clear that “we do not want to adjust too violently and have too much impact on the economy, but we should make a smooth transition”. Its core view is consistent with the policy direction at all levels such as the central bank’s reduction of more than 5-year LPR5 basis points on January 15 this year, which has a strong “wind vane” meaning, or indicates that the “real estate warm wind” at all levels of the central bank will continue to be released this year. Focus on China State Construction Engineering Corporation Limited(601668) , which has developed rapidly in real estate business.
On March 5, the fifth session of the 13th National People’s Congress opened. In the interview, many delegates put forward their opinions and suggestions on the officially launched trading of China’s carbon emission rights market. These opinions and suggestions mainly focus on expanding carbon emission trading to include industries and launching carbon futures trading. In addition to the power industry as the first pilot, industries with high carbon emissions such as steel, nonferrous smelting and building materials will be included in the scope of carbon emission trading in turn. For iron and steel, building materials and other industries, the low energy consumption and carbon capture technology owned by its leading enterprises will become an important force to promote carbon neutralization in the industry. Recommend Sinoma International Engineering Co.Ltd(600970) , focus on Sinosteel Engineering & Technology Co.Ltd(000928) , Metallurgical Corporation Of China Ltd(601618) .
BIPV is an important development direction of green buildings. The 14th five year plan clearly proposes to accelerate the development of non fossil energy, adhere to both centralized and distributed development, and vigorously improve the scale of wind power and photovoltaic power generation. Prefabricated buildings are in line with the development direction of green buildings. The central government and provinces and cities continue to issue policies to promote the penetration of prefabricated buildings. The aging trend of construction workers is obvious, and the labor cost is also increasing. Prefabricated buildings have obvious advantages over traditional cast-in-place buildings in terms of labor cost. Focus on Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , Hangxiao Steel Structure Co.Ltd(600477) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , and Yuanda residential workers.
Risk warning: focus on the company’s performance less than expected; The implementation of policies in the real estate industry is less than expected; The growth rate of special bond issuance and infrastructure investment recovered less than expected; The price of raw materials continues to rise; The epidemic repeated or lasted longer than expected; Adverse changes have taken place in the macro environment.
