Core view
The expectation of steady growth is further strengthened, and attention is paid to investment opportunities in the cement sector. The government work report was issued, and the expectation of steady growth of infrastructure was further strengthened. In terms of policy willingness, the government work report points out that the GDP growth target in 2022 is 5.5%. We believe that the driving force of net exports to the economy in 2022 will decline compared with that in 2021, while real estate investment without speculation plays a more risk prevention role, and infrastructure investment will become the primary starting point for steady growth. In terms of financial support, the government work report shows that the scale of fiscal expenditure will expand by more than 2 trillion compared with that in 2021. The relative restraint of fiscal policy in 20202021 provides more policy space for the present. The special debt in 2022 is 3.65 trillion yuan. In terms of investment, it still focuses on infrastructure. In terms of expression, it supports "projects under construction" and emphasizes "new construction". In fact, the issuance of special bonds exceeded 395 billion yuan in February, with a growth rate of more than 200% for five consecutive months. Under the current rhythm of special bond issuance, we believe that the growth rate of infrastructure investment in a single month may exceed 5% or even 10% from the end of the first quarter to the beginning of the second quarter. Since the beginning of spring, the fundamental data of the cement industry have improved significantly: the price of clinker along the river has increased for three consecutive times, with a cumulative price adjustment of 80 yuan, exceeding the market expectation, the price of cement powder has stopped falling at 512 yuan / ton, and the operating rate of mill is 31.2%, reaching the best level in the same period of the last five years. We believe that there are three main reasons for the current positive cement data: 1 High sea freight suppresses the impact of imported clinker on clinker along the river, 2 High coal prices supported the price of cement, 3 The recovery rhythm of market demand is good, which also supports the price of cement. We believe that the improvement of infrastructure investment demand in the first half of the year is expected to make up for the downward impact of new real estate construction to a certain extent. Cement sales will stabilize, but the profit space per ton will increase significantly. Regionally, we believe that after the supply shock of previous years, the profit recovery space in Southwest China is more obvious than that in other regions.
Market review this week: this week (2022 / 02 / 282022 / 03 / 04), the building materials sector (CITIC) index rose by - 1.6%, with an excess return of 0.1% relative to the CSI 300. Since the beginning of the year, the yield of the building materials sector has been - 8.6%, which is 0.4% higher than that of the CSI 300. Last week, the yield of the preferred portfolio was - 2.2%, compared with the excess yield of the building materials index was - 0.6%, and the cumulative yield / excess yield was - 9.2% / - 9.5%.
Summary of weekly data of building materials: the average price of float glass nationwide this week was 121.77 yuan / weight box, a month on month decrease of 0.6% and a year-on-year increase of 6.8%. The inventory was 46.72 million weight boxes, up 13.3% month on month and 63.4% year-on-year. We believe that the scale of cold repair in the industry is expected to increase in 2022, and the completion of real estate will still maintain a small growth, but we should pay attention to the growth of actual orders of processing plants in the short term. This week, the average price of national mainstream winding direct yarn was 6275 yuan / ton, unchanged month on month; The average price of electronic yarn was 10050 yuan / ton, down 4.2% month on month; The average transaction price of the national cement market this week was 513 yuan / ton, down 0.5% month on month. Glass fiber still maintains a tight balance between supply and demand, and the high price is expected to be maintained. This week, the cement delivery rate increased by 18.6pct to 46.4% month on month; The storage capacity ratio was 62.8%, with a month on month decrease of 1.2pct. The data related to cement shipments have improved significantly, and the steady growth of infrastructure may provide a solid support for cement demand and price.
The production capacity of glass continued to increase, the production capacity of glass fiber remained at a high level, and the inventory of glass fiber increased slightly: the production of glass resumed in January / cold repair 1 / 1, and the production was in progress by the end of February, with a daily melting capacity of 174200 tons, an increase of 150 tons / day compared with the end of January 22. In January, there was no change in the production capacity of the glass fiber industry, with the production capacity of 6.093 million tons (annualized), a decrease of 15000 tons compared with the end of January 22, and the glass fiber inventory of 225000 tons at the end of February.
Investment proposal and investment object
Recommend CSG a ( Csg Holding Co.Ltd(000012) , buy); Under the situation of infrastructure recovery, early cycle products are recommended Sobute New Materials Co.Ltd(603916) ( Sobute New Materials Co.Ltd(603916) , buy), Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) ( Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , buy). It is suggested to pay attention to the cement faucet Huaxin Cement Co.Ltd(600801) ( Huaxin Cement Co.Ltd(600801) , not rated), Anhui Conch Cement Company Limited(600585) ( Anhui Conch Cement Company Limited(600585) , not rated), and Triumph Science & Technology Co.Ltd(600552) ( Triumph Science & Technology Co.Ltd(600552) , not rated). Preferred combination of Dongfang Building Materials next week: CSG a, Sobute New Materials Co.Ltd(603916) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Anhui Conch Cement Company Limited(600585) , Huaxin Cement Co.Ltd(600801) , Triumph Science & Technology Co.Ltd(600552)
Risk tips
The growth rate of infrastructure / real estate investment did not meet expectations, and the price of raw materials fluctuated sharply
