Key investment points
Key events of this week: 1) the national “two sessions” were held to strive for steady growth: on March 5, the national two sessions officially opened. The government work report put forward the 22-year GDP expected growth target of 5.5%, requiring to improve the efficiency of fiscal policy and promote the expansion of effective investment. In the whole year, it is planned to arrange a special debt of RMB 3.65 trillion from local governments to build key water conservancy projects, comprehensive three-dimensional transportation networks, important energy bases and facilities, accelerate the renewal and transformation of urban pipe networks, improve flood control and drainage facilities, and continue to promote the construction of underground comprehensive pipe corridors. While adhering to the bottom line of “housing, housing and non speculation”, we should adhere to the simultaneous development of rental and purchase, accelerate the development of long-term rental housing market and promote the construction of indemnificatory housing. 2) Capital construction grew steadily and the outlook of the construction industry improved: in February, the PMI index of the construction industry was 57.6%, with a month on month increase of + 2.2pct and a year-on-year increase of + 2.9pct. Among them, the business activity index of civil engineering construction industry was 58.6%, with a month on month increase of + 8.9pct. 3) Many cities have adjusted the housing loan and provident fund policies to release positive signals of stable demand: Recently, Zhengzhou, Zhongshan, Tangshan and Nanchang have adjusted the housing provident fund and loan policies, including increasing the loan amount and reducing the down payment ratio of loans, so as to reduce the threshold of housing purchase. 4) Photovoltaic glass leader accelerates capacity expansion: Xinyi solar energy announced that it plans to ignite 3 / 5 photovoltaic glass production lines respectively in 22h1 / 22h2, and another 10 production lines are under construction Flat Glass Group Co.Ltd(601865) announcement plans to invest in the construction of 6 1200t / D photovoltaic glass original kilns and supporting processing lines, and it is expected to ignite 4 / 2 in 23 / 24 respectively. 5) Triumph Science & Technology Co.Ltd(600552) continuously overweight touch display business: the company plans to invest 470 million yuan to build a production line with an annual output of 10.2 million pieces of pen touch display modules and 3.3 million pieces of vehicle touch display modules, with an average annual income of 2.45 billion yuan.
This week’s view: pay attention to the “two sessions” policies and continue to recommend steady growth investment opportunities. On the occasion of the two sessions, the government’s annual work objectives were launched one after another. We believe that expanding effective financial investment, as one of the priorities of the government’s work this year, will make infrastructure an important starting point for steady growth. It is suggested to focus on steady growth investment opportunities and subdivide sectors. 1) In the short term, when the cement industry is expected to grow steadily and heat up, the excess return of the sector is prominent. In the 22 years, the industry has high prosperity toughness (focusing on the enhancement of supply side coordination), and in the medium and long term, the industry is expected to be integrated + extended. 2) From the perspective of water reducing agent, capital construction pull + gross profit margin rise + functional materials open up growth space. 3) The price of float glass has dropped slightly. In the short term, it is mainly to digest social inventory. In the follow-up, with the continuation of demand toughness, the price is still expected to maintain a good level; The downstream demand for photovoltaic glass was boosted, and the new single price increased slightly in March; There is still price elasticity at the bottom of the industry cycle. We are optimistic about the adverse expansion and cost competitiveness of leading enterprises, and focus on the profit elasticity and long-term growth brought by the expansion of traditional glass into the field of photovoltaic glass. 4) Brand building materials enter the strategic allocation time point. In terms of real estate, policy marginal relaxation + increased demand for affordable housing with non real estate developers as the main body, and the demand of the real estate chain is expected to gradually pick up (the end of real estate demand is expected to correspond to 2022q1). We believe that the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials (refer to the resumption in 2014 / 18, and this round corresponds to 2021q4). The double repair of the performance and valuation of brand building materials in 22 years is worth looking forward to. The leaders of each subdivision track have long interpreted the main logic of improving the concentration. The frequent repurchase, incentive and increase of industrial funds highlight the confidence of enterprises and have channels, brands Enterprises with excellent endowments such as capital and management have high certainty. 5) In the field of new materials, carbon fiber / high-purity quartz sand / electronic cover glass ushered in the industrial opportunity of high demand + domestic alternative resonance, and UTG welcomed the outbreak of demand. 6) Glass fiber cycle weakened, roving boom is expected to continue (wind power, automobile and other strong support for demand), and the price center of electronic cloth fell.
Under the expected warming of steady growth, the cost performance of cement sector allocation is prominent. Through the resumption of trading, we found that the cement sector can achieve about 10% excess return in each round of stable growth policy setting and data window period. The economic data verification period showed a volatile trend, and the fundamentals verification period was highly related to performance. At present, it is an important layout time point after setting the tone of steady growth. The cement sector is expected to continue to benefit from the expected warming. In addition, the fundamentals will also have better support to determine its continuity: we believe that although there is a small single digit decline in demand in 22 years, it is expected to remain at a high platform period of more than 2 billion tons. Under the contraction of demand, the willingness of enterprise supply coordination is expected to increase, and the coal price center is expected to move down compared with 2021. Industry integration will accelerate the optimization of pattern, and leading enterprises will actively layout aggregate Commercial and mixed markets contribute to growth, and the cost performance is prominent under the low valuation. This week, the national cement market price fluctuated downward, down 0.3% month on month. At the end of February and the beginning of March, China’s cement market demand officially entered the recovery period, but the overall performance was weak. The shipment rate of enterprises in the South recovered about 60%, and that in the North was only 2-30%, both 20% – 30% lower than that in the same period last year. In terms of price, with the support of rising clinker prices, cement prices in Jiangsu and Zhejiang followed up and increased as scheduled; Due to the slow recovery of market demand in Central China and southwest China, some enterprises are eager to increase shipments, resulting in price shock and adjustment. The national storage capacity ratio was 64.0%, with a month on month ratio of -1.9pct, a year-on-year increase of + 0.1pct; The shipment rate was 45.7%, with a month on month increase of + 18.4pct and a year-on-year increase of + 2.3pct. It is recommended to focus on Huaxin Cement Co.Ltd(600801) , Anhui Conch Cement Company Limited(600585) , Guangdong Tapai Group Co.Ltd(002233) , and it is recommended to focus on Gansu Shangfeng Cement Co.Ltd(000672) , China building materials, Xinjiang Tianshan Cement Co.Ltd(000877) , Jiangxi Wannianqing Cement Co.Ltd(000789) .
Continue to focus on recommending the leader of China’s concrete water reducing agent industry Sobute New Materials Co.Ltd(603916) Sobute New Materials Co.Ltd(603916) recommendation logic: the company’s production capacity planning is clear, and it is expected to continue to grow in the next three years, with a rising market share; The price of raw material ethylene oxide is running at a low level. At the end of September, the price increase of the company is gradually implemented, and the gross profit margin in 22 years may increase significantly; The company’s functional materials (such as anti crack and anti-seepage agent, wind power grouting material, etc.) maintain a high growth, and is expected to grow into an admixture platform enterprise.
Building glass prices fell slightly; The price of photovoltaic glass has increased. The average price of float glass this week was 2428 yuan / ton (Mom – 26, yoy + 259); Weekend inventory of 46.72 million heavy containers (mom + 548, yoy + 1365); The production capacity of glass in production is 174000 T / D (unchanged month on month). Prices in some regions of China fell this week, mainly digesting social inventory. Downstream demand started slowly, and most processing enterprises have not yet resumed full load operation. In the later stage of the market, the inventory in the middle and lower reaches still needs time to digest, and it just needs to be started or slow. We believe that under the “guaranteed delivery” of real estate, the toughness of glass demand is expected to be maintained. On the supply side, considering the high capacity utilization rate of the industry, the subsequent new capacity is limited; In addition, at present, in the production line, the proportion of kiln age production capacity of 8-10 years / 10-12 years / more than 12 years is 13.2% / 8.3% / 5.9% respectively. Cold repair of the old production line may lead to supply contraction. We expect the glass price to remain at a good level throughout the year. In terms of photovoltaic coating, the quotation at the weekend was – 3.2mm, compared with – 3.2mm at the end of the week; Days on month (YoY + 1.3%); The production capacity in process is 44000 T / D (unchanged month on month, year-on-year + 29%).
We believe that the more important reason for the price increase of photovoltaic glass is the recent boost of downstream demand and the decline of industrial inventory; Secondly, affected by the rise in raw material / energy prices, manufacturers transmit cost pressure through price increases. For photovoltaic glass, the new supply under the dual control of energy consumption may be less than expected, and the price at the bottom of the industrial cycle may be upward elastic. Optimistic about the revenue proportion of traditional glass enterprises in the field of photovoltaic glass and improve their cost competitiveness. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) , and suggest paying attention to Xinyi Glass, CSG a, Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Luoyang Glass Company Limited(600876) , etc; At the same time, we continue to recommend photovoltaic glass leading Xinyi solar energy and Flat Glass Group Co.Ltd(601865) .
Brand building materials: under the pressure of the industry, the most difficult time for brand building materials has passed, and the leader welcomes light loading + counter trend expansion. 1) Since 21q4, “bottom of real estate policy + broad real estate market (affordable housing)” + landing of credit risk + stabilization and decline of raw material prices, and the expected bottom of brand building materials has been established. 2) From the 14-year and 18-year recovery, the expected bottom of the real estate corresponds to the bottom of the valuation of brand building materials. 3) Leading enterprises have strengthened their competitiveness and highlighted their growth (category expansion and application expansion) during the pressure period of the industry. The credit impairment of major enterprises has been implemented in 21 years, and the performance and valuation are expected to be restored in 22 years. The leading enterprises of brand building materials have advantages in terms of brand / Channel / cost / capital. They have the ability to cross the cycle in terms of competitiveness and growth, and take the lead in highlighting the encirclement, seizing the leading position and actively arranging the leaders in the process of building the bottom. We recommend Beijing New Building Materials Public Limited Company(000786) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Keshun Waterproof Technologies Co.Ltd(300737) , ad shares, Monalisa Group Co.Ltd(002918) Zhejiang Weixing New Building Materials Co.Ltd(002372) , Skshu Paint Co.Ltd(603737) , Guangdong Dongpeng Holdings Co.Ltd(003012) , Wangli Security & Surveillance Product Co.Ltd(605268) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , it is suggested to pay attention to China Liansu, Jiangsu Canlon Building Materials Co.Ltd(300715) , D&O Home Collection Co.Ltd(002798) .
New materials: 1) carbon fiber boom continues: at the end of this week, the average price of carbon fiber market was 187000 yuan / ton (flat month on month, year-on-year + 3.6), the average price of large tow was 147000 yuan / ton (flat month on month, year-on-year + 1.7), and the average price of small tow was 225000 yuan / ton (flat month on month, year-on-year + 5.3); At the weekend, the inventory of carbon fiber factory was 13 tons (flat month on month, year-on-year – 10). The raw material acrylonitrile market rose slightly, and the price of precursor remained high. We believe that the investment logic of the civil carbon fiber industry lies not only in the high demand growth (wind, light, hydrogen, etc.), but also in the “favorable climate, favorable location and harmonious people”. After seizing the opportunity to catch up, we will further expand the scale and cost advantage and realize the historical opportunity of “domestic substitution” and transcendence. Under the barriers of high technology, technology and capital, those who get the “raw silk” win the world. In the medium and long term, with reference to glass fiber, the industry penetration can be improved or rely on “price” for “demand”. We suggest paying attention to the carbon fiber leader Zhongfu Shenying (to be listed), Weihai Guangwei Composites Co.Ltd(300699) , precursor leader Jilin Carbon Valley, Jilin Chemical Fibre Co.Ltd(000420) , Sinofibers Technology Co.Ltd(300777) , Hengshen shares; Carbon fiber equipment manufacturer Zhejiang Jinggong Science & Technology Co.Ltd(002006) ; Downstream composite manufacturers Sinoma Science & Technology Co.Ltd(002080) , Kbc Corporation Ltd(688598) , Beijing Tianyishangjia New Material Corp.Ltd(688033) , Hongfa new materials, etc. 2) For the quartz glass industry, benefiting from the growth of photovoltaic installed capacity / the transformation of photovoltaic cells from p-type to n-type, the demand for high-purity quartz sand is growing rapidly, the supply side is newly added or limited, and the supply and demand is expected to maintain a tight balance; The demand for semiconductor and military quartz materials is booming, and the barriers to qualification certification are high. Leading enterprises are expected to continue to increase the market share. Jiangsu Pacific Quartz Co.Ltd(603688) and Hubei Feilihua Quartz Glass Co.Ltd(300395) . 3) Electronic cover glass: Chinese enterprises have achieved a technological breakthrough and passed the downstream certification. Under the condition of improving the penetration rate of domestic mobile phones and ensuring the safety of the supply chain, domestic substitution is accelerated. It is recommended to pay attention to CSG a, which has achieved the iterative breakthrough of electronic cover technology and completed the verification of downstream mobile phone manufacturers. 4) UTG: the penetration acceleration of folding screen mobile phones + alternative CPI trend is obvious, and the demand welcomes the outbreak; Take the lead in realizing technological breakthrough and benefiting mass production enterprises. It is suggested to pay attention to Triumph Science & Technology Co.Ltd(600552) .
Glass fiber: the industry cycle is weakened and the boom is expected to continue. This week, the average price of 2400tex winding direct yarn is 6100 yuan / ton (the same month on month and the same year on year); The average price of electronic yarn G75 is 10050 yuan / ton (Mom – 1200, yoy – 4850); The mainstream price of electronic cloth is 3.7-4.0 yuan / meter (down 0.8-0.5 month on month). We expect that the new capacity of the industry will be limited in 22 years, with roving / electronic yarn of about 42 / 100000 tons respectively, and the production line will be put into operation more dispersed. We expect the marginal new capacity of 22q1-22q4 to be 1.7/1.7/3.313000 tons / quarter respectively, with a relatively mild impact. We expect that the global effective production capacity / demand of glass fiber in 22 years will be 9.36/9.43 million tons respectively. The supply and demand are in tight balance. Under the low inventory, the price boom is expected to continue.
The energy cost of glass fiber accounts for about 20%, and the energy consumption is still high. Under the dual control of energy consumption, it is more difficult to increase the new capacity of the industry, and the uncertainty of landing rhythm increases. We believe that the new production capacity will still be dominated by leading enterprises, and the industry pattern is expected to continue to be optimized. The leading enterprises have core competitiveness such as cost and technology, and the continuous upgrading of product structure will hedge the periodicity to a certain extent. The competitiveness of the leading enterprises in the glass fiber industry is significantly enhanced, whether from the perspective of increasing market share or continuous decline of cost. We expect that the profit of the bottom leading enterprises in the next round is expected to increase significantly compared with history. We continue to focus on recommending glass fiber leading enterprises China Jushi Co.Ltd(600176) , Sinoma Science & Technology Co.Ltd(002080) Jiangsu Changhai Composite Materials Co.Ltd(300196) Shandong Fiberglass Group Co.Ltd(605006) 。
Risk warning: macroeconomic downside risk; Demand is lower than expected; Excessive new capacity; Poor capital turnover.
