Consumer building materials are still the preferred track in the medium and long term, and the current valuation is still at the bottom
We believe that the consumption of building materials is still the preferred track in the medium and long term of the building materials sector, and the current valuation is still at the bottom range. We reiterate investment opportunities: it is at the bottom of the fundamentals in the short term, the demand side has a 22-year steady growth force to provide flexibility, and the relay of medium and long-term affordable housing + old reform of stock; Ceramic tiles and other consumer building materials sector leaders are expected to fully benefit from the supply side structural clearing brought by energy consumption control, and the industry concentration is expected to continue to improve. In the industry order, we believe that ceramic tile > waterproof and coating > pipe, and the subject recommendations are Monalisa Group Co.Ltd(002918) , Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Keshun Waterproof Technologies Co.Ltd(300737) , Asia Cuanon Technology (Shanghai) Co.Ltd(603378) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Beijing New Building Materials Public Limited Company(000786) .
22 years of steady growth provides demand toughness, and 22q1 infrastructure / real estate boom is expected to improve month on month
The central economic work conference further emphasized the importance of steady growth and contributed to the continuous repair of demand side expectations and fundamentals. Next year, the macro environment may be more friendly to infrastructure and real estate investment. Recently, infrastructure and real estate policies continue to improve, but the transformation of policies to fundamentals will take some time. Driven by the "local Chinese New Year" policy, the time required for resumption of work in 21q1 is relatively shortened, and the physical volume of infrastructure / real estate has achieved good growth. The prosperity of infrastructure and real estate in 22q1 is expected to be better than that in 21q4, but it may still be affected by the high base year-on-year. Infrastructure is an important direction of steady growth, and 22q1 may perform better. In recent years, in the income structure of leading consumer building materials enterprises, the proportion of non real estate has continued to increase, and the non real estate business has become an important driving force for performance growth. It is expected to support the rapid growth of income in 22 years.
The recovery of real estate policies may benefit short-term demand, and the transformation of medium and long-term affordable housing and stock is expected to relay
The base of real estate physical volume data fell rapidly after 21q2. The recent recovery of real estate policy is expected to be good for short-term demand. Driven by the policy, the recovery of year-on-year growth rate from 22q2 may be more obvious. "Real estate is not fried" is still the main tone of real estate policy. We judge that the real estate sales and new construction are expected to show a marginal improvement trend in 2022, and the completion is expected to maintain a relatively high boom. The central economic work conference continued to emphasize the need to explore a new development model, adhere to the simultaneous development of rental and purchase, accelerate the development of long-term rental housing market and promote the construction of affordable housing. Affordable housing is expected to become a better supplement to the housing market in the future. In the medium and long term, the ongoing urbanization process, the demand for stock transformation and the advent of the era of building materials quality improvement are expected to maintain a huge volume of downstream demand. Listed leaders have taken the lead in opening channel sinking and reform, and the leading advantage of capacity layout is more obvious. Ceramic tiles and other consumer building materials sector leaders are expected to fully benefit from the supply side structural clearing brought by energy consumption control.
The relief of cost side pressure is expected to drive the industry to reverse its predicament in 22 years
Since this year, the downstream of chemical industry has been affected by rising oil prices, limited production capacity and other aspects. The price of consumer building materials and raw materials has increased significantly, and the profit margin has been seriously eroded. However, even under such circumstances, most leading companies still show good anti risk ability. We judge that the current price of raw materials may be at a high level, and the product price is expected to rise during the year-end price adjustment window period of consumer building materials. Under the low base, the performance of the leader of consumer building materials is more likely to increase next year.
From the perspective of valuation, some oversold varieties have reached historical lows
Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) , Zhejiang Weixing New Building Materials Co.Ltd(002372) , Guangdong Kinlong Hardware Products Co.Ltd(002791) , Guangdong Dongpeng Holdings Co.Ltd(003012) have fallen to around 60% ~ 70% after 2016, while other second tier leaders such as Keshun Waterproof Technologies Co.Ltd(300737) have fallen to historical lows. At the current time point, we believe that most consumer building materials still reflect good medium and long-term investment value. In terms of valuation alone, the second-line leaders may have more room to rebound in the short term, but in the medium and long term, the first and second-line leaders may always have a certain poor valuation, and the first-line leaders' fundamentals may be more stable when encountering industry lows. Risk tip: the growth rate of infrastructure investment is lower than expected, the demand for real estate has fallen sharply, the price of raw materials has risen, and the industry competition has intensified.
