Talk every Monday: government work report reaffirms steady growth
The main line of steady growth is gradually clear: steady growth comes first. The government work report of this year's two sessions made it clear that the main goal of this year's development is to increase GDP by about 5.5%, and create more than 11 million new jobs in cities and towns. We should continue to give top priority to stability and put steady growth in a more prominent position. At first glance, the investment side does not seem to have much financial support, but the actual increment is significant, and the main line of steady growth is gradually clear. The fiscal target deficit ratio for the whole year was 2.8%, down 0.4pcts from 2021. However, considering the fiscal balance of the previous year, the actual increase was significant. The fiscal balance at the central level alone reached 1.3 trillion, and the actual finance is still particularly abundant. The investment in the central budget was 640 billion yuan, an increase of 30 billion yuan over the previous year; The special debt of local governments was 3.65 trillion yuan, the same as that of the previous year. In addition, the fiscal expenditure data have given a clear signal that the fiscal expenditure of the general public budget has increased by more than 2 trillion this year, an increase of 8.4% over last year and 0.3% over the same period last year. The budget expenditure of government funds reached 13.9 trillion, a significant increase of 22.3%. In terms of project investment, we will build a comprehensive three-dimensional transportation network of key water conservancy projects, important energy bases and facilities, accelerate the renewal and transformation of urban gas pipelines and pipe networks, and improve flood and waterlogging drainage facilities. For real estate, the central government once again stressed that "real estate is not fried", and stated that it should support reasonable housing demand.
Sources of capital construction funds: the capital sources of government investment and construction projects are mainly public budget and self raised funds. The total expenditure of the national general public budget and government fund budget is about 4.5 trillion yuan higher than that of last year. Taking the sources of investment funds for urban municipal utilities disclosed by the Ministry of housing and urban rural development as an example, the total investment in urban municipal utilities in 2020 was 2103712 billion yuan, of which local financial allocations, self raised funds and Chinese loans accounted for the main parts, accounting for 28%, 25% and 19% respectively. Among them, the central level transfer payment to local governments increased by 1.5 trillion yuan, with a scale of nearly 9.8 trillion, an increase of 18%, which played a significant supporting role.
Enlightenment of the two sessions on building materials Investment: we believe that under the background of strong foundation construction and real estate recovery, pipes, steel structures and waterproof are relatively clear directions, and the cement demand pattern is also better. There will be a large increase in the demand side of Engineering PE pipes. In terms of target selection, we believe that in addition to grasping China Liansu, we should pay full attention to Weixing's advantages in PE water supply and gas pipeline business. In addition, we can consider Guangdong Xiongsu Technology Group Co.Ltd(300599) , which has low energy utilization rate and greater marginal improvement elasticity. The main logic of steel structure is that the proportion of steel structure fabricated buildings in public investment projects is gradually increasing, and the dominant position of waterproof leader Yuhong in public investment projects is not fully recognized, which brings layout opportunities.
Tracking of key sub industries:
Glass: just need to recover gradually. By March 4, the average price of the latest glass in China was 245168 yuan / ton, down 1.35% from the previous week. The demand recovery is relatively slow, the demand of downstream processing plants is not strong, and the operating rate is 40% - 80%. The short-term inventory is difficult to improve significantly, and the manufacturer is still willing to support the price at this stage. The total inventory of production enterprises in key monitoring provinces was 46.72 million weight boxes, an increase of 5.48 million weight boxes or 13.29% over the previous week. The inventory trend in March may indicate the trend of glass price in the whole year. The market demand changes from stock demand to just demand, and it is necessary to pay close attention to the catalysis of processing plant orders on the spot market. Short term supply shocks or short-term supply shocks dominate the market. The completion demand exists objectively, but it needs the improvement of the real estate capital chain. The short-term shock does not change the long business cycle of the glass industry. The annual net profit of the glass leader is expected to remain at a high level, and there is no risk of downward cycle. Continue to focus on recommending Zhuzhou Kibing Group Co.Ltd(601636) , which has entered a new growth period, and the integrated leading Lutheran glass with continuously increasing market share.
Cement: prominent allocation value, short-term focus on the squeeze of coal price on profits. As of March 4, 2022, the national average price of cement was 475.97 yuan / ton, up 0.46% from last week. Market demand is recovering rapidly, and supply side production is also recovering rapidly. In the short term, the performance of the cement sector depends on the expected changes. We believe that the demand for cement will pick up in an all-round way. The number of kilns stopped in the same quarter of last year was generally more than that in the first quarter of last year. The inventory of enterprises decreased slightly compared with last week, and the average national clinker storage capacity ratio was 52.11%, down 1.95% compared with last week. The operating load of the mill was 31.45%, up 16.89 PCTs month on month. The average price difference between cement and coal in this period was 291.38 yuan / ton, down 12.21% from last Thursday. Compared with the same period last year, the average price difference between cement and coal decreased by 13.55%.
Consumer building materials: due to the wind of real estate recovery and valuation repair, real estate sales were quite sluggish from January to February. We expect that the policy side will still maintain its support for real estate recovery, and pay attention to the cities following Zhengzhou and the policy of import and export to Taiwan. After the industry impairment crisis, the emphasis on business quality will slightly loosen the accelerator of growth. The leading performance is less than expected, triggering a chain reaction to the growth of consumer building materials. We believe that the logic of expanding categories and improving concentration has not changed, and high-quality enterprises with alpha attribute such as Yuhong and Weixing are still scarce varieties. Continue to recommend the leading consumer building materials Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Dehua Tb New Decoration Material Co.Ltd(002043) , China Liansu.
Market review: as of the closing on March 4, the building materials sector fell 1.75% this week, and the Shanghai and Shenzhen 300 index rose 1.68%. From the perspective of sector ranking, the building materials sector ranked 21st among Shenwan 31 sectors last week, with an increase of - 9.39% year to date, and ranked 12th among Shenwan 31 sectors.
The top five stocks with weekly gains: Guangdong Golden Glass Technologies Limited(300093) , Ningbo Fuda Company Limited(600724) , Zyf Lopsking Aluminum Co.Ltd(002333) , St Yabo and ad shares.
The top five stocks with weekly decline: Luyang Energy-Saving Materials Co.Ltd(002088) , Xiamen Wanli Stone Stock Co.Ltd(002785) , Skshu Paint Co.Ltd(603737) , Keshun Waterproof Technologies Co.Ltd(300737) , Zhengwei new material. Investment strategy: focus on recommending Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Zhuzhou Kibing Group Co.Ltd(601636) , the industry leader Xinyi Glass whose consumption attribute is dominant in building materials, the strong and constant strong Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , the traditional business maintains high prosperity and enters a new growth period at the same time, and the market share continues to increase; It is suggested to pay attention to the leader of engineering plastic pipe and China Liansu and the leader of steel structure Anhui Honglu Steel Construction(Group) Co.Ltd(002541) , which benefit from infrastructure investment, and recommend the cement sector with underestimated value and high dividend under the expectation of steady growth.
Risk tip: the demand of real estate chain declines, infrastructure investment slows down, and the price of raw materials fluctuates.
